The National Bank of Greece is expected to launch its largest NPL portfolio sale later this month.
Dubbed Project Frontier, the €6 bn securitisation is being marketed through Morgan Stanley and includes roughly €1 bn of residential property-backed loans along with small and medium-sized business loans and some consumer loans.
If successful, the sale would reduce the bank’s non performing exposure portfolios by two thirds. However, market experts say it might prove hard to go through unless the lender revises its price expectations.
‘A number of investors we’re speaking to are less excited due to the weakened recovery prospects but also due to the increasing number of opportunities in more established markets. In view of this, banks now realise that they need to revise their pricing expectations and they’ll have to accept a higher element of contingent pricing (staged payments, earnouts etc),’ said an advisor who wished to remain anonymous.
Earlier this month, Piraeus Bank, Greece’s largest lender by assets, signed a binding agreement to sell a stake in the €1.9 bn Project Phoenix residential mortgages NPE securitisation to Swedish debt specialist Intrum.
Under the deal, Intrum will purchase 30% of the mezzanine and junior notes for a price said to represent a major discount to face value, with the entire transaction understood to be valued at around €100 mln.
Piraeus, which is 26%-owned by the country’s HFSF bank rescue fund, is mulling the distribution of 65% of the mezzanine and junior notes to its shareholders, while retaining 5% itself, together with the entire senior note tranche.
Piraeus Bank is also said to be looking for a buyer for Project Vega, a €6 bn non-performing loan portfolio. Although bidding has not started yet, Intrum is rumoured to be the favourite party for the deal, given its close relationship with the lender.
Intrum is a major partner of Piraeus Bank. Last year, it teamed up with the Greek lender to set up a platform to service a €27 bn bad loan portfolio. It agreed to pay €328 mln to acquire 80% of it, with Piraeus bank holding 20%.
