Pancreta Bank, the biggest co-operative bank in Greece, has launched a tender for the sale or securitization of a small portfolio of bad loans and the servicing of all the NPEs that will remain in its balance sheet. The model is similar to the one agreed between Eurobank and doValue on a smaller scale.
At a time when systemic banks and the servicer of specially liquidated banks PQH, are shifting NPE portfolio sales and securitization schedules, Pancreta Cooperative Bank has decided to go ahead with it.
The bank has launched a tender with Mount Street Mortgage Servicing Ltd as a consultant, with two pillars: the sale or securitization of an NPL portfolio with mortgages on real estate with a gross book value of approximately €297 m, and the servicing of the rest of its NPEs portfolio of a nominal value of approximately €780 m.
The project named “Castor” has entered its second phase, as non-binding offers were submitted last week. Despite the restraint created by the pandemic crisis, indicative offers were submitted by several funds and servicing platforms.
The portfolio to be secured or sold includes for the most part, corporate loans of approximately 1,000 borrowers (mostly small and very small businesses in Crete), which have mortgages on hotels, plots of land and industrial buildings. The value of the collateral is about €300 m. The total demand of the bank amounted to €301 m euros on September 30, 2019.
Investors were asked to bid on either the entire portfolio (direct sale) or 95% of the intermediate and low-grade securities (securitization).
In the case of securitization, three series of securities will be issued: first-class bonds amounting to about € 145 m, intermediate-grade bonds of about € 58 m and low-grade bonds amounting to €94 m. Pancreta will retain all the first-class bonds as well as 5% of the intermediate and low-grade securities.
At the same time, with the sale or securitization, investors have the opportunity to submit bids for the servicing of all NPEs that will remain in Pancreta’s books.
These are loans totaling €783 m from about 5,000 borrowers (most of them self-employed and small businesses). The value of the collateral is estimated at around €600 m.
It is the first domestic market portfolio to have securities concentrated in a geographical area (Crete).
Original Source: Euro2day
Adaptation/Summary: Kiki Athanasiadis