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Alpha Bank: The terms of the Galaxy mega-securitization
Alpha Bank has initiated the bidding process for the investor who will purchase 95% of its mezzanine and junior note securitization bonds of €12 bn NPLs. The Virtual Data Room opened a few days ago and the investors that signed an NDA have gained access to the data in order to be ready to submit non-binding bids on March 9th.
The gross amount of the loans to be securitized amounts to €12 bn and consists of non-performing mortgage loans of all types, as well as unsecured loans of €1 bn. Five Special Purpose Vehicles have been set up where these loans have been or will be transported.
The first SPV will consist of exclusively bad mortgage loans, with a gross book value of € 1.9bn and real estate collateral. The second consists of mainly denominated retail loans with a gross amount of €5.7 bn and the third has NPLs of large and small businesses with a gross amount of €3.1 bn. In addition, the securitization includes loans with no collateral, gross book value of €1 bn, and debt-leasing requirements of €0.3 bn. For these assets, a title will be issued from each of the other two SPVs and will be sold to the preferred investor.
Even though the investors participating in the bidding process have not been announced, the market estimates that PIMCO, Lone Star, Bain, Elliott, Cerberus, Varde are among those who signed the NDAs. doValue and Intrum are not involved, as the former has agreed with Eurobank to acquire 80% of FPS and the latter has acquired 80% of Intrum Hellas from Piraeus.
The sale of 80% of Cepal, which manages €27 bn in assets, is the last opportunity for those seeking to invest heavily in the Greek secondary market, which is the most prominent in Europe due to the large stock of NPEs and the commitment of systemic banks to drastically reduce them over the current two years.
The preferred investor, along with 95% of the mezzanine and junior note notes, will receive a majority stake of the servicer, the new Cepal. The bank will transfer to the new Cepal all 800 employees of the Bad Loan Department.
The listed company will be converted into Holding and almost all banking activities will be merged into a new banking company (new Alpha Bank). This is the same structure that Eurobank adopted, except that the individual targets are more conservative.
Original Source: Euro2day
Adaptation/Translation: Kiki Athanasiadis