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Montagne Russe

10 December 2019 by lberuti

Investors who own debt of ATLIM ( Atlantia SpA ) have been taken on a wild ride over the last 18 months. Their roller coaster began with the collapse of the Morandi motorway bridge in Genoa in August 2018. It eventually led to talks of stripping the main Italian toll-road operator of its lucrative contracts. ATLIM’s position looked even weaker when another bridge, this time in the norther Italian coastal region of Liguria, fell in November, even though for reasons – a mudslide caused by heavy rain - the company argued were beyond its control. But there was another twist today with Cassa Depositi e Prestiti (CDP) possibly entering the fray. CDP is an Italian public institution “using the country’s savings to promote growth and jobs, supporting innovation and the competitiveness of businesses, as well as infrastructure”. The potential arrival of such a “partner” is not necessarily what investors like most, but as it represents a credible alternative to the revocation of the toll-road contract, the news was greeted with a 3% raise of the ATLIM’s stock and a 35bps tightening of its 5-year risk premium to 240bps, which remains close to the high end of its range though.