Alantra advises Piraeus Bank S.A. on the closing of its first NPE Securitisation – Project Phoenix

Date 28 December 2020

Type Credit Portfolio Advisory

Athens – Acting as financial advisor to the deal, Alantra Corporate Portfolio Advisors International, a leading global investment bank and asset management firm, is pleased to announce that its client, Piraeus Bank S.A. (“Piraeus” or “the Bank”) and Intrum AB (publ) (“Intrum”), have now closed the Bank’s first public NPE securitization in the Greek market (“Project Phoenix” or the “Transaction”).
Project Phoenix is the first NPE securitization to date for Piraeus, has a total GBV of €1.92 billion and comprises primarily of non-performing residential mortgage loans at varying stages of restructuring and enforcement processes. This securitisation is expected to be enrolled to the Hellenic Asset Protection Scheme (“Hercules”), the Greek State guarantee scheme, for the protection of the senior note of the Transaction.
The key components of Phoenix transaction are the following:

  • Phoenix SPV issued 3 classes of Notes’ notional amounts as per following: Senior Note €950 million, Mezzanine Note €182 million and Junior Note €792 million. The Phoenix transaction’s parameters have accounted for the estimated cost of Hercules;
  • Piraeus Bank retains 100% of Senior Notes and 5% of Mezzanine and Junior Notes to comply with risk retention requirements;
  • 30% of Mezzanine Securitisation Notes and c.50% of Junior Securitisation Notes are sold to Intrum A.B., a market-leading credit management company operating in 24 countries in Europe and Brazil, for a consideration in cash of €12 million;
  • 65% of the Mezzanine Notes and c.45% of the Junior Notes are expected to be distributed as dividend in kind to the Bank’s shareholders, subject to the necessary corporate and supervisory approvals.

It is not the first time that Intrum and Piraeus reach an agreement; on 16 September 2019, Intrum and Piraeus established a new servicer company, 80% owned by Intrum, with Piraeus Bank retaining a 20% equity stake. The new servicer is licensed and regulated by the Bank of Greece. It services the Piraeus Bank’s existing Non Performing Exposures (“NPE”) and Real Estate Owned Assets (“REO”) portfolio, together with any new inflows, on an exclusive basis, and is able to manage also other NPE and REO portfolios in the Greek market. Assets and proceeds of the serviced portfolio remained on the balance sheet of the Bank.

Pro-forma for the transaction, Piraeus Bank’s NPE ratio will be reduced to 44% from 47%, while the NPE coverage ratio will increase to 46% from 45%, in September 2020.

The parties signed a binding agreement for the Phoenix transaction, subject to all the necessary corporate and regulatory approvals, as well as the consent of the Hellenic Financial Stability Fund, in line with market practice.

Vasilis Kosmas, Partner of Alantra, added: “This transaction represents a pivotal deal for Piraeus Bank and further reiterates the interest of international investors in the Greek market especially in a period of global turmoil during the Covid-19 pandemic. We are proud to have played an instrumental part in it. We are grateful for the trust that Piraeus Bank placed in us in supporting them over the last few months”