Banking and Credit Weekly Bulletin | 26 July 2021

ABS Transactions – History repeats itself for BMW (Debtwire, Debtwire)

• Last week saw the UK auto ABS deal, “Bavarian Sky UK 4”, come to life as BMW financial services finalised the pricing of their two-year senior tranche. The notes were originally standing at £300m but were eventually upsized to £400m.
• Santander and Lloyds Bank were joint lead managers on the deal.
• UK investors acquired 91% of notes, followed by France and other Europe, with 3.3% and 5.3% respectively. A more specific breakdown reveals a total of 17 investors involved in the purchase, with asset managers accounting for c. two thirds and banks for c. one third of the clientele.

Real Estate ABS – pbb Deutsche Pfandbriefbank finances Tuspark’s science park investment programme (Debtwire)

• TusPark Holdings UK secured a £55m investment loan from pbb for their acquisition of three new properties, estimated at 165,000 sq. ft and located in Cambridge Science Park. JLL was deal advisor.
• This long-term financing partnership comes as life science parks have seen one of the strongest performances amongst real estate asset classes in recent years. This trend is equally confirmed by the high level of demand amongst lenders.

Banking – NatWest on verge of completing transferral of Ulster Bank loan book to Permanent TSB (The Times UK)

• NatWest is poised to sign a memorandum of understanding (MoU) on the transfer of €9bn of loans from Ulster Bank to Permanent TSB, announcement could be made within days, in a deal that could ultimately see the British banking group take a stake of 10 to 20 per cent in the Irish state-backed lender.

Banking – Moody’s upgrades senior unsecured ratings of AIB Group and Bank of Ireland Group; affirms deposit ratings of BOI UK while downgrading its BCA following updates to bank methodology (Moody’s)

• The rating actions were driven by revisions to Moody’s Advanced Loss Given Failure (Advanced LGF) framework, which is applied to banks operating in jurisdictions with Operational Resolution Regimes, following the publication of Moody’s updated Banks Methodology on 9 July 2021.

RMBS – Jepson Residential 2019-1 to be called (Debtwire)

• The holder of the call option for Irish reperforming RMBS Jepson Residential 2019-1 will exercise its options and call the deal on or before the July payment date, according to a notice from the issuer. As such the notes will be redeemed at the July IPD.

M&A – Bain Capital Credit increases its stake in doValue (Bebeez)

• Bain Capital Credit, through Sankaty European Investments, has increased its stake in doValue to 13.58%
• Sankaty had originally invested in doValue by purchasing a 10% stake in April 2020

ABS – NBG is opting for the DoValue-Fortress-Bain Capital Scheme as preferred bidder for the NPL Securitization – Project “Frontier” (mononews)

• The portfolio corresponds to a total GBV of €6.1bn and 190,000 loans
• NBG has initiated the NPE securitization transaction “Frontier II”, with total GBV €1.5bn
• With the closing of these securitizations, the NPE ratio of NBG is expected to drop to 6%

Regulatory – Asset Protection Scheme “Hercules II” was approved by the Greek Government (mononews)

• The scheme will allow Greek banks to reduce NPL ratios to single digits, enabling them to properly perform their liquidity provision role in the economy

Loan sale – Santander puts on sale their exposed credit in Hesperia. (Eje Prime)

• Santander is negotiating the sale of their entire credit exposure on the Hesperia hotel group.
• The potentially interested funds are Apollo, Bain Capital and Bybrook.

Real Estate – Blackstone opens Aliseda to third parties to manage its land (EjePrime)

• The American fund is going to partner with promoters through the opening of their servicer, Aliseda. The portfolio of land owned by Blackstone is estimated at €800m.
• The company will also launch a platform for online sales which according to Aliseda’s estimates will be used for 5% of all transactions.

Regulatory – The European banks smoothen credit standards in the Q-2 of the current year. (El Pais)

• The central bank slightly relaxes or maintains the conditions and the price of loans for companies and mortgages.
• Banks had tightened credit standards for companies and mortgages in 2020. This change of mindset shows a positive upturn in the eurozone as confinement rules have been eased and monetary & economic policies have been kept in favor of consumers and companies.

Loan Sale – Novo Banco launches sale of a €640m NPL portfolio (ECO)

• Project Harvey is a single-name portfolio composed of 20 large debtors
• From the 20 debtors, 12 consist of real estate exposures while the remaining 8 consist of corporate exposures

Loan Sale – CGD launches sale of a €128m NPL portfolio (Jornal Económico)

• According to the local newspaper Jornal Económico, Project Mercury consists of a secured NPL portfolio

Loan Sale – Santander Portugal launches the sale of 2 NPL portfolios with a combined GBV of €90m (Jornal Económico)

• The 2 portfolios – Pool 54 and Pool 55 – will be sold together

Banking – Millennium BCP injects €26.6m of fresh capital into ActivoBank (ECO)

• The Portuguese bank continues to invest in its digital bank
• According to sources from BCP the capital injection will “finance the bank’s strategic plan and allow it to comply with regulatory capital ratios”
• During the pandemic the bank has registered a double-digit growth (+46% y-o-y increase in net income)

Banking M&A – Fellow Finance to merge with Finnish fintech Evli Bank and re-brand into Fellow Bank (altfi)

• Listed Finnish alternative lender Fellow Finance has merged with Evli Bank, creating two new entities:
  • Fellow Bank: focused on banking services for SMEs and individuals, as well as creating a new savings account for its customers
  • New Evli to become the group’s asset management arm

• Merger completion is envisioned by first half of 2022 and despite having operations in Germany, Poland, Denmark, Sweden and the Czech Republic, Fellow Bank will focus on the Finnish market