Banking and Credit Weekly Bulletin | 30 June 2022

RMBS – Bank of Ireland to fund €1bn of Dilosk and Finance Ireland senior RMBS tranches as part of CCPC Commitment (Debtwire) 

• Bank of Ireland has committed to fund up to €500m of publicly syndicated Dilosk-originated triple-A rated RMBS senior tranches over the next three years, according to a notice from Dilosk RMBS No. 4 
• The commitment comes as part of requirements imposed by Ireland’s Competition and Consumer Protection Commission to clear the acquisition of KBC Bank Ireland’s performing mortgage portfolio and customer deposits 
• According to the CCPC determination, BoI has also committed to fund up to €500m of Finance Ireland RMBS on the same terms 

RMBS – AIB signs agreement to acquire Ulster Bank’s €5.7bn performing tracker mortgage portfolio (Debtwire) 

• AIB Group plc confirmed that Allied Irish Banks, p.l.c.1 has entered into a binding agreement with NatWest Group plc and Ulster Bank Ireland DAC for the acquisition of a performing Ulster Bank tracker mortgage portfolio with an expected value of c. €5.7bn 
• AIB will acquire the portfolio consisting of circa 47,000 Ulster Bank customers for a total consideration of €5.4bn equivalent to 95.15% of par value, payable in cash and funded from its existing resources 

M&A – Barclays to buy UK specialist lender Kensington Mortgages (FT) 

• The £2.3bn deal is expected to boost its position in the home loans market. Kensington Mortgages is currently owned by Blackstone and Sixth Street 
• As part of the transaction, Barclays aims to purchase their £1.2bn portfolio which is split with around 70% OO and 30% BTL, and an average LTV of 77% 
• Barclays anticipates the deal to be finalised in the fourth quarter 

Financing – Funding circle and Magnetar Capital announce lending partnership (Funding Circle) 

• The partnership sees Funding Circle’s machine learning technology utilised to provide more than £300m of funding to SMEs over a three-year period 

Financing – Pollen Street Capital invests $50m in Doorvest (Coverager) 

• The parties agreed a $50m asset backed credit facility 
• Doorvest is a platform based in the USA in which consumers can partake in owning high-yielding rental homes, whereby the platform buys, manages and finds a resident for the property on behalf of the consumer 

Regulatory – UK FPC withdraws mortgage interest rate stress recommendation from 1st of August (Debtwire) 

• The test checked the affordability of borrowers in scenarios where the interest rate rises by 3% above the reversion rate for a period of 5 years 

• However, the loan-to-income limit of lenders will be maintained, which requires lenders to not exceed 15% of originations with ratios of 4.5x or higher 
• The FPC announced the change as a more effective measure to guard borrowers against increasing household indebtedness 

Banking – Allica Bank secures £55m in equity and debt round (altfi) 

• The total amount raised consists of £25m equity funding from existing investors Warwick Capital Partners and Atalaya Capital Management and £30m of Tier 2 credit line from British Business Bank (BBB) 
• The £30m raised from BBB will be used to support its new lending of £250m to UK SMEs 

• The bank last raised funding of £110m in Series B back in November 2021, also from Warwick Capital Partners and Atalaya Capital Management 

Banking – BoE grants Ashman a sustainable neobank license (altfi) 

• The neobank becomes the first recipient of the newly issued license in 2022 
• Ashman Finance targets borrowers based on the criteria including their impact on energy, water, minerals, waste, health, and wellbeing 
• Once they launch first products, Ashman will seek to establish a platform offering support to help its borrowers improve sustainability 

ABS – Bank of Greece reports an increase of NPLs serviced by Credit Servicing Firms during 2022Q1 by €7.9m compared to 2021Q1, totalling a NV of €87.7bn (Bank of Greece) 

• Serviced loans portfolio by Credit Servicing Firms are comprised of loans to corporations (37%), sole proprietors, farmers, and unincorporated partnerships (14%), and individuals and private non-profit institutions (49%) 

ABS – DBRS Morningstar calls for renewal of the Hercules programme for banks (mononews) 

• The current programme expires in October 2022 
• DRBS warns that inflationary pressures and supply chain bottlenecks will put pressure on consumers and businesses, creating uncertainty around future NPL levels in the economy 

ABS – UniCredit closes €1.1bn GACS securitisation (Debtwire) 

• Itaca SPV is the last GACS NPL securitisation with a €1.1bn gross book value 
• A notes, rated Baa2, have been issued for €125m and pay 1% margin, whereas non rated class B and class J notes amount to €24m and €6m, respectively 
• The portfolio is split between secured exposures (29% of the GBV), junior secured exposures (2% of the GBV) and unsecured exposures (69% of the GBV). Of the secured portion of the portfolio, residential properties amount to 53.2% of the GBV, the rest of the secured part is made of 18% industrial real estate assets, 16% commercial properties, 3% of land properties and 4% of other assets 
• Alantra CPA acted as financial advisor   

Loan sale – Arrow Global purchases €126m procurement reserve portfolio from Guber Bank (Bebeez) 

• The portfolio consists of four disputes related to claims arising from tender reserves with a total GBV of €126m, following the approval of a bankruptcy arrangement 
• The transaction concerned receivables owed by construction companies to public contracting authorities with respect to contracts in an advanced state of litigation 

Real Estate – Mediobanca finalises the acquisition of a trophy property in Milan (Debtwire) 

• The acquisition was finalised via a club deal on behalf of private investors for €243m 
• The prestigious asset is currently occupied by Intesa Sanpaolo and will be managed by Kyralos via the Milan Throphy RE Fund 4 

Real Estate – Oppean Logistic Park has been acquired by Starwood Capital (Debtwire) 

• Starwood Capital paid €274m for the 246,000 sqm park 

Credit – Sabadell sells 40,000 unpaid loans to Norwegian firm Zolva (El Confidencial) 

• The face-value of the portfolio amounted to €832m and consists of 25,000 consumer loans and 14,200 loans to SMEs, with an average ticket of €22,000 
• Other finalists that were in the process included PRA, Axactor, Arena Capital and Savia Asset Management 

Credit – The price of fixed rate mortgage loans in Spain rises above 400pbs (El Español) 

• Thus far only Bankinter has surpassed the 400bps fixed interest mortgage rate, even though most Spanish entities have already exceeded 3% APR 
• The next interest rate hike in the euro zone will take place on the 21st of July 

Servicing – Cerberus studies merger of Haya with another servicer (EjePrime) 

• After an IPO attempt in 2018 and a failed sale in 2020, Cerberus seeks to sell Haya to another servicer 
• The company has €29.5bn in assets under management 

Real Estate – Inmocaixa, JP Morgan, GMP and CBRE IM compete for CaixaBank’s historic headquarters in Madrid (El Confidencial) 

• The most likely buyer seems to be Inmocaixa 

• The highest bids amount to €200m 

Real Estate – Bankinter, Pggm fund and GSA bid for the Resa residences (EjePrime) 

• Resa currently has 42 properties in its portfolio and more than 11,500 rooms, mainly in Madrid and Barcelona 
• The firm could be valued between €800m and €900m 

 Credit – Haya Real Estate reduces debt by €55m and issues €368m in new bonds (ElEconomista)  

• The company, which has had the support of more than 90% of its existing bondholders to proceed with the refinancing, has repaid the €55m of outstanding debt 
• The new majority shareholder henceforth holds a 72.5% participation in the group and will oversee the funds advised by Cerberus 

Servicing – Servihabitat presents its subsidiary specialising in the urban development management of land portfolios (LaVanguardia)  

• Servihabitat’s land portfolio has a volume of more than 37.7m sqm of buildable land with the potential to develop 200,000 homes over the next 10 years 
• One of the “differential” aspects of Serviland, the new subsidiary, is its multi-client vision, which makes it the “first company specialised in urban management that offers a service to third parties” 

Real Estate – The Cortina Koplowitz family are negotiating to acquire a shopping mall owned by El Corte Inglés located in Sol (ElConfidencial)  

• In 2020, the value of the group’s real estate portfolio was €16.1bn, 5.3% lower than in 2019 
• The building has a surface area of 1,857sqm divided into a basement, ground floor and five floors 

Real Estate – Postal company CTT reveals its real estate strategy (CTT)

• CTT entered into exclusive negotiations with a third party with the aim of creating a vehicle to own and manage the retail and logistics portfolio of the company
• CTT, which will be the majority shareholder (i.e., third party investor will hold a minority shareholding), expects that the envisaged transaction results in (i) the detaching of c.400 assets, crystallizing their value, (ii) optimises the management of vacant and unused assets and (iii) creates a vehicle to fund the growth for future BTS opportunities within CTT’s logistics network
• The assets will be managed by an external asset management company
• According to the official statement disclosed by the company, a competitive process was previously launched, resulting in the interest of multiple parties

House prices – Dutch house prices continued to rise despite increasing mortgage 

rates (fd.) 

• In May the house prices increased by 18.8% (YoY), slightly below April’s rate of 19.7%  

• This comes despite the current environment of rising mortgage rates 
• The fd reports that in May 15,749 houses were sold, which is 2% lower than in the same month in the previous year 

Loan sale – NIBC sells €500m performing leveraged loan portfolio (OLB) 

• The portfolio covers 36 corporate loans in Germany and the Netherlands 
• German bank OLB and Dutch insurer a.s.r jointly acquired the portfolio, splitting the portfolio primarily by geographic means 

ABS – Dutch Property Finance 2017-1 to be called in July (Debtwire) 

• According to a note from the issuer, RNHB will call their Dutch BTL RMBS 

Banking – Australien neobank Volt to close down after failed fundraising (Altfi) 

• The neobank failed to raise A$200m which it intended to use to write mortgages 
• Its around 6,000 customers are asked to withdraw their funds ahead of Volt handing back their banking license