The Board of Directors of the National Bank of Greece approved the securitization of bad loans amounting to €6.1 bn through the “Hercules” program.
The procedures will start in the coming weeks and the target is to complete the transaction within the first four months of next year, which is earlier than originally planned.
The securitization is part of Project Frontier, which aims to reduce the bank’s NPLs by 60%. 80% of those loans are mortgages.
Almost half of the amount (€3 bn) includes high-quality loans (senior), for which the State guarantee applies. The remaining €3.1 bn include medium (mezzanine) and low-grade (junior) loans for which the state guarantee does not apply.
According to a presentation NBG to investors last November, the total securitization of €6.1 bn includes 190,000 bad loans from 80,000 borrowers, of which 90% have real estate collateral. 77% relate to mortgage, 18% business and 5% consumer loans.
In the coming days, the application will be submitted by the National Bank for the part of the loans for which the State can guarantee. This is followed by securitization and the submission of non-binding offers by funds. Last step includes binding offers and signing the transfer.
Original Source: Capital.gr
Adaptation/Summary: Kiki Athanasiadis