(Bloomberg) -- Barclays Plc has priced a mortgage-backed securities transaction that is financing the sale of its Italian home loans to GoldenTree Asset Management LP.

Under the deal, Barclays is transferring the mortgages — which have a €4.1 billion ($4.4 billion) face value — to a special-purpose vehicle called Miltonia Mortgage Finance S.r.l.. Miltonia will then issue notes backed by the mortgages.

The transaction is part of Barclays’ exit from Italian retail banking, which follows the sale of its consumer-finance operations in the country to Mediobanca in 2015. 

While funds and accounts managed by GoldenTree have agreed to purchase a portion of the Miltonia-issued securities, Barclays will hold on to the largest, a €3.65 billion chunk of class A bonds.

The senior notes, which were priced at par, will have an initial margin of 90 basis points over three-month Euribor, according to a person familiar with the matter.

The mezzanine and junior portions of the Miltonia notes have been priced at a discount to their face value, the person said, asking not to be identified because the details aren’t public.

Barclays will also hold a slice of the other types of notes to comply with regulatory requirements. On top of that, it will receive cash proceeds of approximately €400 million, including a small deferred portion to come from cashflow generated from the portfolio, it said in an April 24 statement.

A representative for GoldenTree didn’t immediately respond to a request for comment. A representative for Barclays said the bank had no comment beyond the April 24 statement.  

GoldenTree Nears Deal for €4 Billion Barclays Italian Mortgages

--With assistance from Laura Benitez.

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