Banking and Credit Weekly Bulletin | 25 February 2021

ABS – Multiple new deals announced this week introducing a variety of assets in the UK primary market (Debtwire)

• Taurus 2021-1 UK, Blackstone UK last mile logistics CMBS prices on Monday (22 February), with all tranches set to price at the tight end of guidance or the tighter tested spreads
• Together is marketing its first commercial mortgage securitisation, Together Asset Backed Securitisation 2021-CRE1
• Twin Bridges 2021-1, a GBP 400m UK buy-to-let RMBS, is being marketed by Parataus AMC with pricing scheduled for next week
• Canada Square Funding 2021-1, Citi’s UK buy-to-let RMBS platform, will market a full capital structure securitisation. Assets are backed by collateral from Hey Habito, Fleet Mortgages, Topaz Finance and Landbay

ABS – Further stake in Sainsbury’s portfolios Highbury and Dragon acquired by REIT and BA Pension Trustees (Debtwire)

• Supermarket REIT and British Airways Pension Trustees acquired from Aviva Investors a further 25.5% stake in the Sainsbury’s supermarkets backing the Highbury Finance and Dragon Finance securitisations, for a purchase price of GBP 115m
• The two firms had formed a joint venture in May 2020 and acquired an initial 25.5% stake from British Land for GBP 102m
• Sainsbury’s holds the remaining 49% beneficial interest

ABS – Telereal Securitisation refinancing and updated valuation (Debtwire)

• Telereal Securitisation, the securitisation of British Telecom exchanges owned by Telereal, announced a new issue of senior and mezzanine notes to redeem the existing senior, mezzanine, and junior notes
• The valuation of the collateral properties has been updated and is c. 16% higher than in 2016

Credit – UK Export Finance launches new guarantee for importers of UK goods of up to £30m (TradeFinanceGlobal)

• The programme will provide guarantees of up to 85% of the contract value with a UK exporter
• The aim is to boost Britain’s exports and support SMEs during the post-COVID recovery period.
• The credit agency has significant liquidity, with a capacity of £50bn to support exporters

Banking – Ulster Bank confirmed to be exiting the Irish Market in “phased withdrawal” (Irish Times, Debtwire)

• Parent company NatWest confirmed that the bank, which has a c. €20bn net loan book and c. €22bn of deposits, will be wound down and that it is in discussions with AIB and PTSB to sell its commercial and retail mortgage books, respectively

Loan Sale – AIB agrees to sell non-performing PDH portfolio to Apollo Global Management (Irish Times, Debtwire)

• The sale, is expected to be capital accretive, driven by a reduction of RWAs and an alleviation of the calendar provisioning burden

Credit – Dynamic Credit has started investing in consumer loans through Fellow Finance’s platform (FellowFinance)

• The Dutch asset manager and direct lending firm has agreed a forward flow model whereby it will invest in good quality consumer loans intermediated by Fellow Finance

Loan Sale – Intesa Sanpaolo to sell two NPL portfolios with GBV of €5.7bn (Debtwire)

• The two portfolios are Project Portland, a €1.2bn leasing NPL portfolio, and Project Kenobi, a €4.5bn unsecured NPL portfolio
• According to reports, the loans were originated by both Intesa and UBI Banca
• Non-binding offers are expected at the end of March

ABS – UniCredit Leasing sells the mezzanine and junior notes of its latest NPL real estate lease securitisation to Bayview Asset Management (Debtwire)

• The NPL real estate lease securitisation is backed by a €1.58bn GBV portfolio
• The €466m senior tranche was rated Baa2/BBB by Moody’s/Scope, and will benefit from Italy’s state guarantee scheme (GACS)
• The unrated mezzanine and junior tranches amount to €91m and 10m respectively

Banking M&A – Banca Finint aiming to be listed by Q1 2022 or earlier through potential merger with Banca Profilo (Bebeez)

Real Estate – Grupo Lar sells 22 “Eroski” supermarkets to Blackbrook Capital for €60m (Expansión)

Real Estate – Sareb launches Project Neo composed of more than 300 land assets (Brainsre)

• Sareb is looking for a specialized asset manager for the development of 308 land assets located in multiple Spanish provinces

Real Estate – Kronos acquires 500,000 sqm in Madrid for €60m (Ejeprime)

• The company expects to invest €200m in the residential development of 1,400 new dwellings

Loan Sale – CGD to sell two NPL portfolios with a combined GBV of €450m (Debtwire)

• According to news agency Debtwire, Portuguese State-owned bank Caixa Geral de Depósitos (CGD) is preparing the sale of two NPL portfolios with a combined gross book value (GBV) of €450m
• CGD will market an unsecured portfolio with a GBV of €300m and a secured portfolio with a GBV of €150m, with the aim to launch by the end of the quarter

M&A – EuroBic opens competitive process for acquisition with Novo Banco and Banco CTT among the interested parties (Jornal Económico)

• According to Portuguese newspapers Jornal Económico and Jornal de Negócios, commercial bank Novo Banco and postal group CTT (which is the sole owner of Banco CTT) are two of many parties interested in acquiring Portugal-based bank
• The sale is a result of the so-called Luanda Leaks scandal involving the bank’s largest shareholder, Isabel dos Santos. In the beginning of 2021, the bank decided to run a competitive sale process and aims to short-list six bidders by March

Real Estate – H.I.G. Capital acquires three residential buildings in Lisbon (H.I.G. Capital)

• Miami-based private equity firm H.I.G. Capital has reinforced its presence in the Portuguese residential sector through the acquisition of three residential buildings located within central Lisbon
• In 2015, H.I.G. Capital acquired two portfolios from Finangeste for a total consideration of €110m. The portfolios consisted of 77 real assets and 114 secured loans

Regulatory – Greek Government is about to implement the new interest subsidy program for performing loans and propose the legislation of “Gefyra 2“ (news247)

• Regarding the interest subsidy program, the European Commission approved the Greek programme amounting to €500m
• The aim of the program is to provide working capital for SMEs affected by COVID-19. Support will be capped at €1.8m per company
• Regarding “Gefyra 2”, by 31 May, freelancers and businesses affected by the pandemic and who have received a business loan will be able to apply for state-subsidised loan instalments
• Borrowers with a performing loan will receive a 90% interest-instalment subsidy and non-performing loans a 80% subsidy

ABS – Alpha Bank announced that it has entered into a definitive agreement with certain entities managed and advised by Davidson Kempner (Alpha Bank)

• Sale of 80% of its loan servicing subsidiary Cepal Holdings Single Member S.A
• Sale of 51% of the Mezzanine and Junior securitisation notes of the € 10.81 bn GBV NPE portfolio as part of Project Galaxy
• The transaction is expected to reduce Alpha Bank’s NPL ratio from 29 per cent to 13 per cent

Regulatory – Key provinces start to roll out the new individual bankruptcy laws and regime (Local Source: Sina Finance)

• After Shenzhen rolled out the first individual bankruptcy law in August 2020, Zhejiang and Shandong also followed suit and announced court ruling guidelines with respect to personal bankruptcy cases
• Multiple local courts have already issued rulings under the new regime
• It is expected that individual bankruptcy laws would be rolled out in other regions throughout 2021, giving lenders more clarity and efficiency in dealing with individual borrowers