Portuguese Government is discussing extending credit moratoria with banks

4 March, 2021

Economy Minister Pedro Siza Vieira admitted, earlier on February, the extension of credit moratoria or other solutions to support the payment of these credits. “We are discussing what to do about the debt that exists and, eventually, an extension of maturities may be justified in this sector,” the minister said in a webinar.

The minister admitted that he is discussing the issue of moratoria with the Bank of Portugal (BoP) and the Portuguese Banking Association (APB). On the table “it is being discussed not only the suspension of payments that we determined until September,” but the “extension of even the term of the remaining debt.

He added: “It’s something that we have to see to what extent it is justified, and with what scope”.

The minister’s statements open the door to extending the term of loans, a form of credit restructuring, as some business associations are considering.

Admitting that company reserves are “exhausted” and equity “further destroyed”, Siza Vieira said that the Government “is aware that it will need to launch corporate capitalisation instruments”. “We will need to make a supplementary effort on the public and private side to endure these months,” he added.

In relation to instruments to support this recapitalisation, the minister said that “quasi-equity, convertible debt, or participating loans” solutions were being studied.At the same online conference held on Tuesday, 9 February, promoted by the Portuguese Tourism Confederation, the chairman of BCP Miguel Maya had already advocated strengthening measures to support tourism, including the continuation of credit moratoria for companies and workers in the sector.

Original Story: Público | Rosa Soares
Photo: Photo by Magda S in FreeImages.com
Edition & Translation: Prime Yield

Alpha Bank enters into definitive agreement with Davidson Kempner over Euro 10.8 billion Galaxy portfolio

3 March, 2021

Alpha Bank announced on 22nd February that it has entered into a definitive agreement with Davidson Kempner Capital Management LP referring to the sale of 80% of its loan servicing subsidiary Cepal Holdings Single Member S.A. (“New CEPAL”), and the sale of 51% of the Mezzanine and Junior securitization notes of the Euro 10.81 billion NPE portfolio (the “Galaxy Securitizations”) (together with the sale of New CEPAL, the “Transaction” or “Project Galaxy”).

Vassilios Psaltis, CEO of Alpha Bank, said:”We are excited to enter into a long-term agreement for Project Galaxy with Davidson Kempner, a highly experienced US investor. This is a turning point for our Bank as we are making a decisive step in dealing conclusively with the legacy asset quality issues from the long-lasting recession in Greece.In spite of the unprecedented conditions we experienced due to Covid, we are proud to have managed to sign such a complex transaction in just eight months from launch, to attract significant international investor interest and to fully meet our targeted capital envelope for this transaction. Alpha Bank now continues with undivided attention to implement the last mile in its de-risking strategy and to drive forward the implementation of its transformation plan so as to capture superior growth opportunities.”

Original Story: Alpha Bank Press Release
Photo: Alpha Bank Website
Edition: Prime Yield

Family indebtedness grows in January and reaches 66.5%

3 March, 2021

The percentage of indebted families (with debts in arrears or not) in Brazil reached 66.5% in January this year, staying above the rates of December 2020 (66.3%) and January last year (65.3%). The data is from the National Survey of Consumer Indebtedness and Delinquency, released today (18), in Rio de Janeiro, by the National Confederation of Trade of Goods, Services and Tourism (CNC).

The percentage of defaulters, i.e. families with debts or overdue bills, reached 24.8%, down from 25.2% in December, but up from 23.8% in January last year.

Families who will not be able to pay their bills added up to 10.9% of the total, down from 11.2% in December, but up from 9.6% in January 2020.

“With the end of the [emergency] aid and the delay in the vaccination calendar, lower-income families will need to adopt greater rigour in organising their budgets. This situation makes credit play an even more important role in income recomposition. We must continue to expand access to resources with lower costs, but also extend the payment terms of debts to keep delinquency under control,” said economist responsible for the survey, Izis Ferreira.

Credit cards
According to the CNC, the percentage of credit card debt among the total number of people with debts reached 80.5%, a record high.In January last year, the rate was 79.8%. Other main reasons for debt in January this year were: installment plans (16.8%), car loans (9.9%) and personal loans (8.4%).The average time with overdue payments reached 63.3 days and the average time committed to debt stood at 6.9 months, the CNC said.

Original Story: Agência Brasil | Vitor Abdala
Photo: Photo by Bruno Neves in FreeImages.com
Translation: Prime Yield

ECS to sell €1.5 billion in restructuring funds

3 March, 2021

ECS – Sociedade Gestora de Fundos de Capital de Risco was put up for sale at the beginning of the year, in an operation that came public after the company owned by António de Sousa and Fernando Esmeraldo received expressions of interest from international funds, Portuguese daily Jornal Económico reported.

The newspaper said that the proposals that have been received by ECS cover several perimeters, ranging from global purchase offers that cover all funds to partial offers, involving only some of the four active funds. The process has already attracted interest from several international funds, such as Bain Capital, Blackstone, Fortress, Cerberus and Arrow/Norfin.

According to the newspaper, the three largest ECS funds that are up for sale are worth almost €1.5 billion. The proceeds of the sale will go to the banks that own the participation units in these funds: Caixa Geral de Depósitos, BCP, Novo Banco, Santander Totta and Oitante (ex-Banif).

Original Story: Eco|Newsroom
Photo: Palácio do Governador Hotel website
Translation: Prime Yield

Bank NPLs to peak at 6.5% to 8% in 2022, says Fitch

3 March, 2021

Fitch agency predicts a difficult 2022 for Spanish banks. The rating agency estimates that the financial sector will reach a peak in the default rate in 2022, which will be around 6.5% and 8%, although in any case it will depend on the evolution of the economic recovery.
Fitch Ratings expects Spanish banks’ asset quality to weaken as borrowers’ ability to pay comes under pressure from the consequences of the coronavirus crisis, particularly when the support and containment measures expire,” the agency said in a note.

In the opinion of the rating agency’s experts, in 2020 there was already “evidence” of a deterioration in asset quality due to the consequences of Covid-19, although non-performing loans fell to 4.2%, down from 4.5% at the end of 2019.

Nevertheless, Fitch stresses that throughout the year, especially in the fourth quarter, banks have been identifying potential risks and have increased the number of loans classified as Stage 2, i.e. on special watch, the step prior to considering them doubtful. “SME and consumer lending will be the sectors most vulnerable to economic stress,” he concludes.

Original Story: El Independiente | Elena Lozano
Photo: Photo by Lotus Head in FreeImages.com
Translation: Prime Yield

National sells NPL portfolio to Bain Capital for €1.6 bln

2 March, 2021

The National Bank of Greece Group on Friday announced the completion of a transaction for the disposal of a nonperforming, predominantly secured, corporate loan portfolio to the investment firm Bain Capital Credit for a total principal amount of 1.6 billion euros.

In a statement, National Bank said that Morgan Stanley & Co International Plc acted as financial adviser, Karatzas & Partners and Milbank LLP as local and international external legal counsel, respectively, and Deloitte Greece as transaction and accounting adviser to NBG.

Original Story: Ekathimerini | Newsroom
Photo: Photo by Michalis Famelis / Wikimedia Commons

NPL&REO News

Month: March 2021