Alantra advises Greek bank Alpha on the disposal of €10.8bn NPEs to Davidson Kempner – Project Galaxy
Value €10.8 billion
Acting as Co-arranger and financial lead advisor to the deal, Alantra, a leading global investment bank and asset management firm, is pleased to announce that its client, Alpha Bank S.A. (“Alpha Bank”) has now signed its first public NPE securitization in the Greek Market, Project Galaxy (“The Transaction”).
Project Galaxy, the second largest rated NPE securitization in Europe, with a total GBV of €10.8bn is comprised of non-performing multi-asset loans at varying stages of restructuring and enforcement processes. This is also the first securitisation for Alpha Bank that is enrolled to the Hellenic Asset Protection Scheme (“Hercules”).
The key components of the Galaxy Transaction are the following:
- The Galaxy SPVs issued 3 classes of Notes’ notional amounts as per following: Senior Notes of €3.8 billion, Mezzanine and Junior Notes of €7 billion, with Alpha Bank retaining 100% of the Senior securitization notes
- 51% of the Mezzanine and Junior securitization notes will be sold to an entity managed and advised by Davidson Kempner for a consideration payable in cash, at an aggregate valuation for 100% of those notes of Euro 40 million. The total proceeds for Alpha Bank including the Senior notes and the sale price of the Mezzanine and Junior notes correspond to c.35% of the total gross book value of the portfolio sold.
- Alpha Bank will retain 5% of the Mezzanine and Junior securitization notes, to comply with risk retention rules, and intends to distribute 44% of the remaining notes to shareholders, subject to regulatory and corporate approvals.
The Transaction took place in parallel with the sale of 80% of New CEPAL’s share to an entity managed and advised by Davidson Kempner, with Alpha Bank retaining the remaining 20%. Alpha Bank will maintain customary governance rights in New CEPAL in line with its minority shareholding.
Upon completion, the Transaction will fundamentally transform Alpha Bank’s balance sheet, bringing the NPE and NPL ratios in Greece down to 24% and 13% respectively, a decrease from 43% and 29% in September 2020. The effect of Project Galaxy on Alpha Bank’s Capital Adequacy Ratio falls within the Bank’s budgeted capital envelope, at c.280 bps. The frontloaded de-risking of the Balance Sheet will allow Alpha Bank to normalize its cost of risk going forward.
The Transaction is expected to close in Q2 2021, subject to obtaining all applicable corporate, regulatory and governmental approvals and consents
Francesco Dissera, Managing Director and Head of Alantra’s securitisation practice, says: “This transaction confirms Alantra’s unique position as the leading advisor in supporting European Issuers and Investors in structured NPL trades, including securitisations. It is also a great testament of the benefit of having APS support schemes in place to deleverage European NPEs, and the continued interest of global investors for these exposures”.
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