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npl-reo Market News: Spanish Real Estate Intelligence

Intrum Hellas to grant 3-month grace period on loan payments
The NPL servicer of Piraeus Bank proceeds to ease the burden caused by the coronavirus crisis without bureaucratic procedures. Without any bureaucracy or application, certificates and evidence, Intrum Hellas - which is by 20% owned by Piraeus Bank and services over €27 bn NPEs - is giving a 3-month grace period to all its borrowers (individuals and small/medium-sized companies) who had paid their installments by the end of February. All the borrowers have to do is make a phone call and ask for it. The same strategy would apply to corporate clients as long as the installments were paid up to the end of February. Intrum Hellas management is willing to suspend the entire tranche (interest and capital) for three months. The company, in cooperation with the management of Piraeus Bank, is preparing for massive loan restructurings that will be necessary after the quarantine expires. Original Source: Euro2day Adaptation/Summary: Kiki Athanasiadis
Fortress purchased the loans of Haragionis Group
Fortress has agreed to purchase Haragionis Group's bank loans. This is the fifth agreement for the purchase of the Group's loans, which completes the restructuring of its loan liabilities. Following the acquisition of the group's loans by HSBC, Attica Bank, NBG and Piraeus Bank, Fortress agreed with Eurobank to purchase part of the Group’s debt to the bank. It took more than three years since Fortress came to an agreement with the Haragionis family to complete the gradual purchase of most of the group's debt obligations, with significant discounts from banks. Fortress now controls loans with a nominal value of over € 130 million and is the sole creditor of the Group. The loans of the other subsidiaries are either regulated or covered by collateral, following the forecasts made by the banks in the previous three years. In addition, there are small leasing contracts that are expected to be repaid within the next 12 months real estate cash flows. Fortress, since last year, has been boosting the group's working capital to run real estate upgrades, with minimal real estate sales. The landmark of the bailout process was the agreement with Piraeus Bank. After a complex deal, Fortress acquired a critical mass of Haragioni Group loans, while the rest were settled. In total, the cash and real estate received and to be received by Piraeus will cover the net book value of the loans (€ 39 m). After the formal rescue plan is completed, the group will focus on developing and upgrading its properties. Investments in the reconstruction, upgrading and extension of real estate have already begun or are underway, the most significant being in Citizens' Mansion Megaro Politi) in Piraeus, which is expected to be completed in May. Very significan is also the upgrade of the Park Lane office building on Patision street. In addition, works are underway at the Athenian Capitol in Ermion in Plaka and on the property of Kriezotou 11. Original Source: Euro2day Adaptation/Translation: Kiki Athanasiadis
DBRS: The impact of COVID-19 on the Greek banks
The spread of the coronavirus, along with the sharp drop in oil prices has an impact on the investor confidence and causes serious upheavals in the financial markets, according to a new report by DBRS. The situation is evolving rapidly and while the full impact on the European banks remains uncertain, it is sure to be negative. According to the agency, the NPL portfolio sales to investors may be delayed. In particular, it expects banks in Italy and Greece to be affected the most. Banks in Spain, Portugal and Ireland which have been selling bad loans in 2019 are also expected to experience strong shocks. The extent of the impact on loan repayments is uncertain, but impairments will likely increase, reflecting lower financial forecasts on impaired models and deteriorating asset quality. In the meantime, the measures adopted by governments and central banks will provide some relief, although they will also create challenges. In terms of balance sheets, banks are in a better position than at the start of the 2008 crisis, with stronger capital, liquidity and financial assets. However, if the markets remain under significant pressure for a long time, DBRS expects that some banks should seek funding to meet the2020 refinancing needs and suspend debt issuance as market financing will be very expensive and for some banks prohibitive. DBRS also sees potential operational risks, but technology and regulators should support the operation of the banks. The agency points out that as the coronavirus crisis erupts, the situation is evolving rapidly. "The full impact on European banks remains uncertain, however, we believe it will be clearly negative. There will be pressure on revenue and pressure on asset quality, and as the situation evolves we could see more measures being announced by central banks and governments to mitigate the economic impact”. Original Source: Capital Adaptation/Translation: Kiki Athanasiadis