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All Market News: Spanish Real Estate Intelligence

Piraeus Bank pushes the implementation of its NPL reduction plan
Piraeus Bank seems determined to continue implementing the plan to reduce its non-performing exposures, despite the sharp decline in interest due to the coronavirus, with scant, for the time being, results. The spread of the pandemic in Europe found Piraeus, as well as other domestic banks, in the middle of the implementation of a program to reduce its non-performing exposures, in order to consolidate its balance sheet. In the above context, two tender procedures were in progress: the first in cooperation with Eurobank concerned the sale of the loans of the Kypriotis hotel group and the second, the first three portfolios of the Trinity project. On top of those, three more were added for the loans of MIG, the businessman I. Avrantini (NEL) as well as the sale of a loan with a pledged hotel in Serbia. The sale of the loans of the MIG group, with a nominal value of €548.8 m and a slightly higher total demand, is the most important process, as the loans are secured by all shares of Vivartia and Attica Group, held by MIG. Piraeus decided in early March to start the tender, surprising the market, which considered it reasonable to postpone the process, so as not to be affected by the drastic deterioration of the investment climate. The submission of a single binding offer by the Irish Comer Group, which is said to be subject to price hurdles linked to the impact of the pandemic and its measures on the economic activity of the MIG group, confirmed the estimates of the market. Since March 23 until today, Piraeus has not taken an official position on the tender, while Comer's offer was not discussed at the Board of Directors of the Bank, which took place last Friday, March 27. Therefore, it is not clear whether the bank will consider the offer as a basis for discussion and enter into a period of exclusive negotiations with Comer or will declare the tender barren. In the latter case, the bank must, in the light of the prevailing conditions, request the supervisor's tolerance for the timing of a new tender. The second tender procedure concerns the sale of a series of non-performing business loans, a total claim of €760 m and a net book value of €119 m (project Trinity). These are reported or pending loans from contractors, hoteliers, publishing companies, etc. For the first three portfolios of the Trinity project, Piraeus has been in negotiations with PIMCO since last month, after the submission of binding offers. Recently, non-binding offers were submitted for Trinity 4. At the same time, a tender procedure is underway for the sale of the non-performing loans of the businessman Ioannis Avrantinis, with a total report of €137 m and an accounting value of €16 m. These loans are secured by shares of companies that control wind farms (operating or licensed) with a capacity of about 30 MW. The outbreak of the pandemic has found Piraeus and Eurobank to discuss with HIG Capital the signing of a binding agreement for the sale of loans of the Kypriotis hotel group, after a "painful" tender as the collapse of Thomas Cook. Piraeus' total demand for the above loan amounts to €69 m euros and the net book value amounts to €41 m. The discussions have been frozen until the visibility for the next day of tourism is improved. Finally, Piraeus is ready to start a tender process for the sale of a loan, which is secured by a hotel in Belgrade (project Danube), while the completion of the transfer to the Czech APS of the Iris portfolio is still pending. These are mainly unsecured loans with a total claim of 1.8 billion euros and a net book value of 76 million euros at group level. Original Source: Euro2day Adaptation/Translation: Kiki Athanasiadis
 
Banks and funds renegotiate almost closed NPL deals
Due to the coronavirus, funds and servicers investing in the NPL portfolios of the Greek banks are now asking for the renegotiation of the terms, a step before the contract signing. Some also ask for smaller-scale adjustments to already signed contracts. The coronavirus pandemic found the domestic banks amid an ambitious NPE reserve program through securitization and portfolio sales. The tender procedures that were in early stages (Alpha Bank - securitisation of the Galaxy portfolio and the sale of 80% of Cepal) or in the planning process (NBG - the securitisation of the Frontier portfolio and Piraeus bank – the securitisation of the Phoenix portfolio) have been postponed or will be postponed as the intensity of the pandemic leaves no room for other options. At the same time due to the pandemic the signing of agreements for mature procedures, such as project Neptune of Alpha Bank, project Icon of NBG and project Trinity of Piraeus Bank are is delayed. Preferred investors have either already asked for a renegotiation of the price of their binding offers, or are reconsidering their stance, suspending negotiations to sign a purchase agreement. The funds seek either a reduction of the price by up to 30% or to pay part of it, provided that pre-agreed earn-out schemes are achieved. This way, they are asking the banks to take part of the risk . The binding offers were submitted in a promising environment. The economy was recovering, even at a slower pace than in the previous recession, real estate prices with long-term or short-term leases rose sharply, and auctions were due to intensify. Most of the above parameters have been cancelled due to the pandemic, or in the best case scenario, they are questionable. The funds say that one of the reasons why Standard & Poor's has downgraded the prospects of domestic banks is the delay in the recovery of the real estate market, due to the pandemic and its restrictive measures. Therefore, the funds estimate that the achievement of budgeted receipts will go back for at least 12 months, a development that reduces the expected return. Hence, one of the first steps of the renegotiation is to pay part of the price, if certain performance is achieved. Original source: Euro2day Adaptation/Summary: Kiki Athanasiadis
 
Greek banks: Threefold increase of the NPL inflows since February
The Greek bankers, taking into account the initial data from the loan payments, point out the danger that the coronavirus crisis will turn into a banking crisis and then into a new financial crisis. New non-performing loan inflows increased threefold since February, completely changing the positive course of last year, with a formation of new non-performing loans. According to the bankers, this increase is not entirely justified by the coronavirus crisis and the restrictive measures that affect economic activity after the lockdown of the last three weeks, as banks find that the large mass of borrowers who were cooperative before the crisis, continue to do so. In contrast, those who ignored payments as a strategy began to do so again. At the same time, those who had not settled their non-performing loans are now hiding behind the coronavirus crisis and are not discussing regulation. The banks point out that the borrowers must understand that the supportive measures taken by the government are temporary and directed only to those who are really affected by the spread of the pandemic crisis. Support measures by the government must also be weighed day by day and their duration must not be announced in advance. All of the above is necessary for the government and banks to work together to achieve the major goal: to support sustainable businesses at risk of being "wiped out" by a natural disaster, such as a pandemic, and to fund them the day after the crisis. Original Source: Capital Adaptation/Summary: Kiki Athanasiadis