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Roundtrip Completed: Atlantia Update

15 July 2020 by jbchevrel

Atlantia SPA (ATLIM) reverted tighter by -142bp today. It closed 258.5bp, the tightest level since the beginning of March. Italy agreed on a compromise solution over ASPI. Following a meeting last night, the Italian cabinet has given a mandate to the Economy and Transport ministers to reach a final agreement with ATLIM over ASPI. The solution was said to involve €3.4B of previously proposed remedies, and the Benetton family will gradually reduce their stake to less than 10% so that they won’t have a seat on the board. The Italian state lender CDP will get a controlling stake via a capital increase and ASPI will eventually be spun off from ATLIM and will be listed. Alternatively, ATLIM could sell its entire (88%) stake in ASPI to CDP and other institutionals. This is close to the best outcome that credit investors could have hoped for, at this stage. ATLIM 5y CDS had peaked at 760bp at the height of the COVID crisis on 3/18. The range has been roughly [100,760] since the collapse of the bridge in Genova which was the cause for ATLIM to go from IG to HY.