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Eurobank first in Greece to knock on Hercules’ door

Eurobank is the first Greek bank requesting to integrate the €7.5 bn Cairo portfolio into the Hercules state guarantee scheme. As announced by the bank, Cairo consists of three securities (Cairo I, II and III), of different sizes and with different types of loan claims.

Three different SPVs are created for the three securitizations. Yesterday’s request relates to the first two categories. Consumer and mortgage loans in Swiss franc totaling €1.8 bn have been included in the first SPV. The second SPV included retail loans – in the national currency – of €2.9 bn, while the third SPV will include €2.7 bn corporate and small business loans.

The amount of the state guarantee Eurobank applied for and concerns the senior note for both types of securitization amounts to €1.6 bn. The total amount of guarantees to be applied together with the third securitization, reaches €2.4 bn. The bank has already secured the required BB- rating required by the law in order for the State to provide its guarantee for the senior part of the securitized loan portfolio. The application for Cairo III will follow in the coming weeks after the bank receives the required rating.

The securitization of Cairo is the first NPE securitization in Greece to apply for the Hercules Program. Together with Pillar, completed in 2019, they are the first NPE securitizations in Greece and are key components of Eurobank’s strategy aimed at reducing the NPEs index to 15% in the first quarter of 2020 from 31% at the end of the third quarter of 2019. The bank is aiming at a single-digit rate of 8.8% of NPEs at the end of 2021.

The Cairo portfolio will be serviced by FPS, which is now owned by 80% by the Italian doValue group. Eurobank recently completed the process of transferring its staff to FPS, which kicks off its business under the new shareholder with 950 employees.

Original Source: Kathimerini

Adaptation/Translation: Kiki Athanasiadis

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