Wed. Mar 22nd, 2023

Brussels, 26 August 2022

The European Commission has found Italy’s plan to enable the transfer of certain State guaranteed loans to a newly created platform managed by AMCO S.p.A. to be free of any State aid.

The Commission found that, under the scheme, the Italian State will be remunerated in line with market conditions. It also found that the sale of the loans to the platform managed by AMCO as well as any potential new loans granted by it will be carried out on market terms.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: 

“This scheme will enable Italy to maximise the recovery of loans while reducing the impact of the existing State guarantees on the national budget and the effects on the borrowers with good prospects of viability. This is an important step towards recovery for the Italian economy, while ensuring that competition is not distorted.” 

The Italian measure

AMCO is a full-service credit management company whose voting shares are fully owned by the Italian Ministry of Economy and Finance. It has set up a platform to (i) centralise the management of loans, (ii) maximise their long-term value and (iii) limit the payments from Italy due to the possible triggering of the State guarantees.

Italy notified the Commission of its intention to allow banks to transfer off their balance sheets around €12 billion in two types of loans: (i) loans benefitting from a State guarantee initially approved under the State aid Temporary Framework in April 2020 (SA.56966); and (ii) unguaranteed loans of either the same debtors or connected ones. The economic and legal terms of the State guarantees, namely their duration, coverage and premiums, will remain as initially approved by the Commission.

Under the scheme, the loans will first be transferred from the banks to AMCO’s platform. The price for those loans will be based on private investors’ bids. In return for the transferred loans, investors, which may include the originating banks, will receive notes.

If the originating banks decide to retain all notes, the price will be agreed among all banks, ensuring that no beneficial pricing will be set for any portfolio of loans. Additionally, the price will be independently verified by a third-party evaluator. In any case, AMCO will not buy any of these notes.

Once these loans are on the platform, AMCO will be responsible for managing them. While AMCO will focus on more complex loans, it will cooperate with private servicing companies for smaller loans portfolios. AMCO’s remuneration for these services has been benchmarked against comparable transactions for which data was available in the Italian market.

AMCO also may provide new financing to some of the borrowers, which must be viable companies that only face temporary difficulties. Such loans will be provided by AMCO alongside financing from private operators under the same terms and conditions.

Finally, AMCO may provide short-term liquidity assistance to the platform to cover mismatches between the inflows from the loans and the required payments for the notes. These loans will be remunerated with an interest rate that is in line with market benchmarks.

The Commission’s assessment

The Commission assessed the scheme under EU State aid rules, in particular Article 107(1) of the Treaty on the Functioning of the European Union (‘TFEU’).

Under EU State aid rules, if a Member State intervenes as a private investor would do and is remunerated for the risk assumed in a way a private investor would accept, then such an intervention does not constitute State aid.

In this case, the Commission found that the transfers of the loans as well as AMCO’s services will be carried out on market terms, i.e. in a manner that would be acceptable for a private operator. This is in particular ensured by the following elements:

  • First, the price of the loans transferred to the platform will be established through a mechanism driven by private investors via an open and competitive process. If the notes are retained by the originating banks, the price will also be set in line with market conditions, through an independently verified system. Finally, any public investor will be accepted as note holder only under the same terms and conditions as private investors.
  • Second, the remuneration for the management of the loans will be benchmarked to the fees negotiated by asset management companies in comparable transactions on the market, ensuring a sufficient level of profitability. Any sub-servicers will be selected through an open tender procedure to exclude any advantages.
  • Third, the new financing provided by AMCO to borrowers will be at the same rate that private operators would offer. As regards the liquidity assistance, the pricing charged for these loans is based on a methodology that takes into account the risk taken by AMCO and leads to a remuneration in line with market conditions.

On this basis, the Commission approved the Italian measure under EU State aid rules.


The EU Treaty is neutral when it comes to public versus private ownership. Under EU State aid rules, if a Member State chooses to intervene as a private investor would do, and is remunerated for the risk assumed in a way a private investor would accept, such an intervention does not constitute State aid and falls outside of EU State aid control. The choice of the type of intervention lies with the Member State and it is always the decision of the Member State whether to grant any State aid. The Commission, as the body responsible for EU State aid control, has to ensure that any measure implemented is in line with EU rules.

The non-confidential version of this decision will be made available under the case number SA.64169 in the State Aid Register on the competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.

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