Project Cairo

ServiceCredit Transactions

Value €7.5 billion

Dec 2019
Sell-side advisory - Securitization
Value €7.5 billion

Acting as Co-arranger and financial lead advisor to the deal, Alantra Credit Portfolio Advisors International, a leading global investment bank and asset management firm, is pleased to announce that its client, Eurobank Ergasias S.A. (“Eurobank”), has completed its second public NPL securitization in the Greek market, Project Cairo.

Project Cairo, the largest Greek NPL securitisation to-date, with a total GBV of €7.5bn is comprised of non-performing multi-asset loans at varying stages of restructuring and enforcement processes. This is expected to be also the first securitisation that will opt-in for Hellenic Asset Protection Scheme (“Hercules”), the Greek government recently approved HAPS guarantee scheme.

The key components of Cairo transaction are the following:

  • Cairo SPV will issue 3 classes of Notes’ notional amounts as per following: Senior Note €2.4 billion, Mezzanine Note €1.5 billion and Junior Note €3.6 billion. The Cairo transaction’s parameters have accounted for the estimated cost of Hercules and are subject to the targeted rating confirmation.
  • Eurobank will retain 100% of Senior Notes and will opt-in for the Hercules. Furthermore, it will retain 5% of Mezzanine and Junior Notes to comply with risk retention requirements.
  • 20% of the Mezzanine Securitisation Notes and the minimum required percentage of the Junior Securitisation Notes will be sold to doValue S.p.A., the leading NPL servicer in Italy. The implied valuation based on the nominal value of the senior notes and the sale price of the mezzanine and junior notes corresponds to 33.3% of the total gross book value of the securitized portfolio.
  • 75% of the Mezzanine Notes and 44.9% of the Junior Notes to be potentially distributed as dividend in kind to shareholders, subject, inter alia, to corporate and regulatory approvals.

The transaction took place in parallel with the disposal of part of FPS to doValue, which – adding FPS to its existing business in Italy and Spain – is set to establish itself as the top loan servicer and REO manager in South Europe. The Bank has recently sold portfolio Pillar to PIMCO, which will be also serviced by FPS along with the remaining 11.3bn performing and non-performing exposures that are still retained by Eurobank.

With this milestone agreement, Eurobank enters the final stages towards completion of its accelerated plan for the clean-up of its balance sheet and becomes the first Greek bank to turn the corner on the major legacy issue of the NPE stock. Together with Pillar, they are the first NPE securitizations in Greece and key components of Eurobank’s frontloaded NPE reduction strategy, which aims to achieve the targeted NPE ratio of below 15%.

With an NPE pipeline currently sat at over €20bn across the Greek banking sector, Greek HAPS guarantee scheme approved, rising real-estate values, and re-worked borrower protection laws, the market is primed for another active year ahead.

Vasilis Kosmas, Partner of Alantra, added: “This transaction represents a landmark deal for the Greek Market, the inaugural NPL securitization to opt-in for the new Hercules asset protection scheme. We are proud to have played an instrumental part in it. We are grateful for the trust that Eurobank placed in us in supporting them over the last few months”.

Related Transactions