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Bloomberg
UniCredit has agreed to terminate a swap transaction with authorities in Sicily to end a dispute over deals entered into in 2005 and 2006.
The transactions served to hedge Sicily’s long-term debt obligations. Both sides won’t be making any further comment on the resolution of the dispute, the Italian lender said in a statement.
Disputes between a number banks and authorities in Sicily arose out of a period when public bodies across Europe bought derivatives to keep their borrowing costs down in case of rising interest rates. The swaps turned out to be expensive when rates fell to record lows in the wake of the financial crisis.