Sace, this is how the Italian Guarantee goes
What emerged from the hearing of the CEO of Sace, Latini, in Parliament on the Italian Guarantee.
Guarantee Italy in the two-year period 2020-2021 disbursed no more than 30 billion euros , above all to large and medium-sized companies. This is the figure that emerged from the hearing of the CEO of Sace Pierfrancesco Latini at the parliamentary commission of inquiry on the banking and financial system . Alessandra Ricci , head of Sace's Guarantee Italy and Green New Deal program and Simonetta Acri , Sace's chief Mid market officer, were also present together with the CEO.
The Italian Guarantee tool
The liquidity decree, issued on 8 April 2020, is the regulatory source on which Guarantee Italy is based, an instrument thanks to which the state company Sace chaired by Rodolfo Error can provide guarantees against guaranteed by the State on bank loans. Initially, the reference ceiling was 200 billion , “referring to a borderline scenario, in which the entire banking portfolio needed a counter-guarantee from the State”, Latini underlined. Only € 30 billion was used, about 15.18% of the instrument. Guarantee Italy “is aimed at all enterprises, SMEs and large enterprises, the legislator had established a priority for small and medium-sized enterprises, for those with up to 499 employees and a turnover of 50 million euros”. The implementation of the measure provides guarantees between 70 and 90% depending on the company, "the duration is up to 6 years, from 2021 an extension to 8 years has been envisaged as well as the duration of the pre-amortization phase with the payment of the interest only, at the beginning it was 24 months then it was extended to 36 months from the beginning of 2021. The loan amount reaches no more than 25% of turnover, therefore a measure of 3 months of turnover lost by companies or double the annual wage bill ”, explains Latini. The purpose of the investments is directed towards personnel expenses and investments in working capital, therefore including payments of receivables from suppliers.
The requests of the ordinary procedure: 18 operations for a total of 10 billion euros
“For the ordinary procedure we have 18 transactions for a total of 10 billion, all transactions relating to guarantees on new loans, there are no replacements of guarantees already granted – underlined Latini in his report -. We have indicated the reference conditions for this operation: an average financing rate of 1.85%, an average cost of the guarantee of 0.74% , a range of financing that goes from 20 million to 6.3 billion of the transaction plus relevant and a duration from 9 months to 6 years ". These operations were carried out by the largest banks. “The banks acting on these operations are the most important in the country, not only Unicredit and Intesa San Paolo,” said Latini. “ The beneficiary companies are 17 , one has had an extension of the duration of the original operation – continued the CEO of Sace -. We are talking about representative companies of the Italian industrial system, not only automotive but also metallurgical, chemical, naval, catering services, wholesale and retail. Sectors that considered the crisis and that represent strategic sectors for Italy. The important element that I would like to underline is that by intervening on these operators we have also intervened on the entire production chain of reference ".
Simplified procedure: 3800 operations and 20 billion in loans
The simplified procedures refer to loans of up to 365 million euros. “On the simplified procedure, the requests are about 3800 for about 20 billion. 97% of the guarantees refer to loans , only 3% to those technical forms that we introduced later – explained Latini -. The average loan rate is 1.75% with an average annual cost of 1.01% and guaranteed loans of between 4 thousand and 365 million euros by amount. The duration is from two to eight years. The financial institutions to which we have referred are institutions authorized to carry out credit in Italy and included in specific registers or sections, registers kept by the Bank of Italy. There were about 60 agent banks and the most active banks are the three most important groups: Intesa San Paolo, Unicredit and the BPN Group ”.
Italy guarantee: little used by SMEs
The companies benefiting from the simplified procedure totaled 1899. “ The participation of SMEs in Guarantee Italy is extremely limited and residual even though they represent 20% of the beneficiaries by number, 50% are mid-corporates and 30% are large companies. The weight of medium and large enterprises in our case is much more relevant. The sectors reflect the sectoral distribution of our production fabric, they are very diversified from telecommunications, information technology, catering, tourism, agri-food, the metallurgical industry, These are those sectors that have suffered the most, directly or indirectly, the closure of activities or restrictions on mobility ".
The geographical distribution
The geographical distribution reflects the geographical distribution of medium and large enterprises on the national territory. “ 65% of requests came from northern Italy, 23% from the center and 12% from the south and the islands – says CEO Latini -. It is the photograph of our entrepreneurial fabric with the application of an emergency tool which, not having a structural industrial policy nature, could only reflect the distribution of the Italian entrepreneurial fabric ".
The trend of loans in the two-year period 2020-2021
The use of the tool has declined over the two-year period 2020-2021. “The instrument had a peak in use after the conversion of the liquidity decree in June 2020 until the technical deadline at the end of the year. About 20 billion uses of the tool were requested – added the CEO Latini -. In 2021 the use of the instrument has decreased , at the end of the year we will close with a use of about 10 billion, therefore halved ". The prospects for the next six months are not defined. “In the next semester we have no specific expectations – says Latini -. What we expect is that the use of this tool will continue for the companies that have suffered the most from the crisis in 2020 and that have not yet benefited from the recovery phase ”.
The extension of the Italian Guarantee to June 2022
Guarantee Italy should end on December 31, 2021. "However , the budget law of 2021 provides for an extension of the instrument to the next semester – adds Latini -, therefore until June 30, 2022 in line with the extension of the European temporary framework".
"Guarantee Italy has aimed well"
Sace's Italian Guarantee has been able to identify the companies to be financed well. " Guarantee Italy is an emergency tool that has aimed well : companies that had diseases before the pandemic have been excluded a priori and the onerousness of the guarantee has prevented companies able to go to the capital market from accessing the tool without problems to get supplies ”therefore at less costly conditions – said the CEO Latini. Sace, explained Latini, did not have a decision-making power on the onerousness of the guarantee. "The conditions were defined by the temporary framework of the EU, with a table from 0.25% to 3.5% depending on the size of the company and" we did not have the ability to directly intervene on the amount of this remuneration ".
Few non-performing loans
The improvement in the Italian economic situation is leading to the first repayments of the loans underlying the Italian Guarantee. Non-performing loans linked to Sace's instrument, says Pierfrancesco Latin, can be counted on the fingers of one hand. " There are five of them and for limited amounts compared to the total e", Sace adds Latini, he did not resort to the postal savings of Cdp because he does not need it, "First of all we are no longer under the direction and coordination of Cdp even though we are still part of the group and then we do not need liquidity, first we receive the premiums and then eventually we pay the claims ".
Secret session on the 500 billion for drills
Latini wanted to respond in a secret session to the question of the deputy Maurizio Felice D'Ettore on a financing project for drilling operations in the Arctic, an operation that Sace would have guaranteed for 500 million euros . “The operation is not completed, it is being evaluated”, commented Sace's number one, asking to go to a secret session which lasted about 5 minutes.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/sace-ecco-come-va-garanzia-italia/ on Fri, 10 Dec 2021 11:33:42 +0000.