Piraeus Bank is moving forward with the securitisation of about 111,000 bad housing and business loans over the next 12 months. The loans have mortgages on real estate.
During a recent teleconference after the announcement of the results of the first quarter, the bank’s management announced that the two securitisations will begin within 2020 and the target is that they are completed by early of 2021 the latest.
The first project (project Phoenix) concerns 58 thousand housing loans, with a gross book value of €2 bn. Most of them (67%) are reported, while the rest are in deep delay. The average demand per borrower (a total of 22 thousand) is set at €90 thousand, while the average remaining duration of the portfolio is about 20 years.
The bank estimates that the first notes of this title will have a nominal value of about €900 m. Piraeus will maintain 100% of the senior notes and will sell to the preferred investor up to 95% of the mezzanine and low (junior) grading titles.
Piraeus’ target is to start the tender process for the second securitisation (project Vega) within 2020 as well. The portfolio includes 53 thousand mortgage loans of all categories. The gross book value of the loans amounts to €5 bn.
The bank will suggest 3 special purpose vehicles (SPVs), where it will transfer the loans by category. It is estimated that the face value of the senior note titles issued by the three SPVs, will be around €1.4 bn.
The loans included in the two securitisations are expected to be transferred to the special purpose vehicles (SPVs) within July.
Piraeus Bank estimates that the loss from the sale of the intermediate grading titles of the two securitizations will range between €1.1 bn and €1.4 bn.
JP Morgan (project Phoenix) and UBS (project Vega) are to advise the two securitizations, while Alantra is reportedly a consultant in the portfolio structure.
After the transfers, Piraeus Bank will proceed with a corporate transformation. The banking sector will be separated and will contribute to a new banking company (new Piraeus). The new Piraeus will be 100% controlled by the listed company, which will be transformed into a Holding company. The corporate transformation is expected to be completed in the last quarter of the year.
Original Source: Euro2day.gr
Adaptation/Summary: Kiki Athanasiadis