Portugal’s Novo Banco to Sell €3.3-Billion Portfolio of NPLs

21 March 2019

According to an article published yesterday in the online economic journal Economia Online, the Portuguese bank Novo Banco has initiated the sale of a portfolio of non-performing loans (NPLs) called “Project Nata 2.” The portfolio comprises a portfolio of 1,000 corporate loans in default, 70% of which are unsecured, worth €3.3 billion. The sale has already attracted the interest of several major international investors, including Bain, Cerberus and KKR.

Novo Banco, which is 75% owned by the US-fund Lone Star and 25% owned by Portugal’s Resolution Fund, has recently come under pressure from the European banking authorities and the Bank of Portugal to decrease its non-performing exposure (NPE) more rapidly.  The successful completion of the transaction, which the bank expects to occur in the third quarter of this year, would lower the bank’s non-performing exposure to 12%. The bank also began to suffer intense criticism when the bank’s president, Antonio Ramalho, recently announced that Novo Banco would request €1.145 billion from the Resolution Fund’s Contingent Capital Mechanism to cover losses with the sale of NPLs incurred in 2018.

Novo Banco is currently in the process of receiving non-binding offers for the portfolio. Alantra, a Spanish company that worked with Novo Banco in other similar transactions, is leading the sales operation.

Original Story: Economia Online – Alberto Teixeira