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LCTM pays back $150 mln loan to Italy UIC
ROME, June 13 (Reuters) - The Italian Exchange Office (UIC), an agency of the Bank of Italy, said on Sunday it had accepted a request by U.S. hedge fund LTCM to pay back nearly a $150 million loan made by the UIC in 1996.
"On June 7, Long Term Capital Management (LCTM) asked the Italian Exchange Office if it could pay back in advance the $150 million loan underwritten by the UIC in 1996, in accordance with an option in the original agreement, the UIC said in a statement.
"The UIC accepted the request collecting the whole amount underwritten by $150 million," it said.
"From October 1996 to June 7, 1999, interest returns regularly drawn by the UIC amounted to around $26 million, equivalent to an average annual return...of 6.6 percent," the statement added.
When the LTCM ran into trouble last year, eyebrows were raised when it emerged public money had been put in such a fund, set up with the sole purpose of making speculative bets on the market.
There was further surprise when UIC Director Pierantonio Ciampicali acknowledged last October that the agency had not realised that LCTM was a hedge fund when it placed the investment.
The UIC had a $250 million exposure to the LCTM hedge fund, made up of a $100 million investment placed in 1994 and the 1996 loan.
Bank of Italy Governor Antonio Fazio, addressing parliamentary budget committees, said in October Italy had realised then $122.9 million on its original $100 million investment paid from reserves.
Tom |
