Annual Accounts and Report as at 30 June 2011 Draft - Mediobanca

B.4 Large risks30/6/11 30/6/10a) Book valueb) Weighted valuec) No. of exposures15,788,39814,547,2261516,202,06713,858,91017Leveraged finance transactionsAs part of its corporate lending activity, Mediobanca takes an active part inbuyout transactions promoted or sponsored almost entirely by private equityfunds in order to take over companies with promising growth prospects, low debtlevels and stable cash flow over time. Such transactions have a sub-investmentgrade rating, a non-recourse contractual structure, and borrowing iscommensurate with future cash flow levels. The purpose of such transactions isnever for Mediobanca to acquire target companies, as the majority stakes are helddirectly by the private equity funds.As at 30 June 2011, deals of this nature amounted to €2,239.9m, up slightlyon the figure of €2,054.5m, reported last year approx. 13% of the corporate loanbook, half of which in relation to domestic transactions, with the vast majority ofthe remainder for deals within the confines of the Eurozone. Movements duringthe period under review included the addition of six new deals worth a total of€232.9m, full repayment of seven loans (in an amount of approx. €132.5m), andother changes (use of credit lines and capitalization of interest) up €85m.The portfolio does not contain any positions with companies in financialdifficulties, while restructuring agreements for three accounts worth a total of€277.4m have been reached, one of which during the course of the financial year.– 373