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GE acquires nonperforming loan portfolio in Italy.

GE confirms its commitment to the Non Performing Loans sectors in Italy by acquiring, through its subsidiaries GE Real Estate Italla and GE Corporate Financial Services("GE"), and in partnership with Pirelli RE/Calyon, a portfolio of non-performing loans originated by Banca Antonveneta and Interbanca. With a gross book value of approximately 2.6 billion [euro], the deal is the second largest of its type in Italy; GE is the majority stakeholder with the 50% stake, with the remainder being held by the joint venture Pirelli RE/Calyon.

The acquisition represents the second tranche of a portfolio on which GE and Pirelli RE signed an exclusive mandate with ABN Amro at the end of last year. The first part of the portfolio had a book value of circa El billion. The portfolio comprises over 20,000 loans covering a wide range of mixed commercial, corporate and real estate assets across Italy. Pirelli RE will service the portfolio and act as asset manager.

The transaction represents GE's third acquisition of a non-performing loan (NPL) portfolio in Italy over the last 18 months, and as a result of today's announcement, GE will have a total ex posure of over E5 billion of gross book value in loans. GE's first transaction was the acquisition of a l.8 billion [euro] (gross book value) portfolio from Unicredit Group in Spring 2006, followed by the 1 billion [euro] (gross book value) acquisition from Banca Antonveneta with Pirelli RE in January 2007.

The combination of these acquisitions firmly establishes GE as a leading investor in the non-performing loans sector in Italy. The transactions have enabled GE to broaden their past experiences from classic real-estate ventures into a strong partnership in the non-performing loans sector.

Olivier Piani, president of GE Real Estate Europe commented: "This transaction is evidence of our commitment to grow our NPL business and our proven ability to execute large deals even in more unsettled markets. We are actively seeking to acquire more restructuring portfolios in Italy and throughout Europe, particularly in the commercial sector, and help financial institutions manage their risk.

"In a time of market uncertainty, GE Real Estate, backed by GE's AAA rating, remains a purveyor of liquidity to the financial services industry as demonstrated by the acquisition of approximately 3 billion [euro] of performing commercial property loan from Bradford & Bingley PLC in the UK, last month."

Giuseppe Recchi, president and CEO for GE in Italy and South East Europe, commented on the transaction: "We are very pleased to have concluded this deal with our two partners, Pirelli RE and Calyon, demonstrating the strength of our partnership and shared ambitions for growth. This transaction is part of GE's renewed commitment to be a long term and permanent player in the Italian market with all its divisions, and we look forward to further opportunities for growth within both the financial and manufacturing sectors where we are active."
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Title Annotation:FINANCE
Comment:GE acquires nonperforming loan portfolio in Italy.(FINANCE)
Publication:Real Estate Weekly
Date:Jan 2, 2008
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