NPL&REO News

Bain, Cerberus and KKR compete for the largest NPL portfolio in Portugal ever

15 April, 2019

The sale process of Novo Banco’s “Projeto Nata 2”, a NPL portfolio with a gross nominal value of €3.3 billion, is now underway. Being the largest portfolio to ever be sold in Portugal, this project is attracting the interest of very-well known investors as Bain Capital, Cerberus and KKR, which are competing to take these problematic assets.

«Nata2» sales process is still in the very early stage, and is being coordinated by Alantra, the advisor of Novo Banco on the bidding process. The bank is also being assisted by KPMG consultants. The goal is to close the deal by the end of the third quarter of 2019.

Project Nata II comprises about 1,000 credits granted to companies which have been in default, and that had been given by the bank in the former BES period. About 30% of these contracts are secured, while the rest is unsecured. Its sale will help the Portuguese bank to reduce the bank’s Non-Performing Exposure (NPE) ratio to 12% by the end of the year.

Original Story: ECO | Eco News
Photo: Novo Banco
Edition: Prime Yield

Cerberus wants to take €350 million with Gescobro sale

22 March, 2019

Cerberus Capital Management has just put the sales signal over Gescobro, its credit recovery company in Spain. According to several sources listened by La Información, the North-American fund is completing the five-year disposal programme established when it acquired the credit recovery society from the Spanish fund Miura, back in 2014.

The same media added that Ceberus aim is to obtain around €350 million with the deal, although the final price will depend on how the sales process will go on. Alantra is advising Cerberus on the sales process, which is expected to last until the end of first semester, at least. The non-bidding offers phase is now open.

The sales value is based on the significant portfolio of bad credit acquired by the company over the last few years from the main Spanish financial entities, and whose gross asset value totals more than €8.6 billion. More precisely, Gescobro owns 12 unsecured credit portfolios with a gross book value of €8.3 billion and other two secured credit portfolio with a gross nominal value around €300 million.

Estimated recovery procedures pending amount to almost €600 million over the next 15 years.

Besides, Gescobro has “servicing” agreements with the majority of the main Spanish banks, being responsible to manage and recovery their non performing credits. In total, these business area means other €3.5 billion third party owned under management. Among these last ones, there is the recently acquired «Mauser Project».

Established in 1980, Gescobro is specialist in non-secured credit from SMEs.

Original Story: La información | Pepe Bravo
Photo: Cerberus online
Edition:Prime Yield

Caixa Económica Federal aims to raise R$3.9 billion through subsidiary listings

20 March, 2019

State-owned Brazilian bank Caixa Economica Federal is hoping to raise R$15 billion through the listing of four of its subsidiaries, chief executive Pedro Guimaraes told newspaper O Globo in an interview published on Saturday.

The bank aims to list its insurance, asset management, lottery and credit card subsidiaries in the second half of 2019 or first half of 2020, Guimaraes said. In January, he had said they could be listed within 12 months.

The company had previously disclosed that it plans to sell minority stakes in the subsidiaries through listings in Sao Paulo and New York.

Original Story:CNBC | Reuters
Photo: Caixa Econômica Federal
Edition:Prime Yield

Intrum plans to reinforce investment in Greece’s NPL market

19 March, 2019

«A step toward the right direction to reduce the moral hazard in the country,» is how Intrum Justitia Group Chief Executive Mikael Ericson describes the agreement between the Greek government and the country’s banks concerning the amendment of the so-called Katseli law for the protection of debtors.

In an interview with Kathimerini, the head of one of the largest European nonperforming loan servicing companies says that the group’s plan in Greece is to be independent and to benefit both the lenders and borrowers, as the former will be getting paid for products and services they have sold, and the latter will recieve assistance to improve the state of their finances.

The responsible also revealed Intrum’s plans to reinforce its presence within the Greek market, after having acquired two large NPL portfolios. «We are considering a variety of options and more recently we have applied for a debt servicing license with the Bank of Greece», he said. Besides, «we are also looking at other alternatives, one potentially being to buy a licensed debt servicing platform, another to do a carve-out from a local bank, or even to build a platform of our own».

Original Story: Ekathimerini | Evgenia Tzortzi
Photo: Intrum
Edition:Prime Yield

Bain Capital raises €1.25 billion fund to purchase European Bank Loans

18 March, 2019

Bain Capital’s credit arm raised 1.25 billion euros for a new fund to purchase European bank loans, according to information given to Bloomberg by a person familiar with the matter.

Bain Capital Credit’s new Special Situations Europe fund will target banks’ secured debt, non-performing loan portfolios and real estate assets, said the person, who asked not to be named because the information isn’t public. The money raised for the fund, the first dedicated to European soured loans at Bain, exceeded an initial target of €1 billion, the person said.

Bloomberg contacted an external spokeswoman for Bain, who declined to comment on the matter.

Last year alone, Bain acquired nine bank loan portfolios across Europe, in Greece, Italy, Portugal and Spain, with a gross book value of more than €4 billion, revealed the same source. Bain Capital has $105 billion in asset under management, according to its website.

European lenders’ efforts to clean up their balance sheets since the global financial crisis have created a burgeoning market for trading non-performing loan exposures.

While more than a third below their peak, Italian lenders still had €222 euros of NPL on their books as of June, according to PricewaterhouseCoopers data. Greek lenders are also seeking to slash €89 billion of bad debt from their books, equivalent to about half of the country’s annual economic output.

Original Story:Bloomberg | Luca Casiraghi
Photo: Bain Capital
Edition:Prime Yield

Novo Banco plans to sell even more NPL in 2019

7 March, 2019

Portugal’s Novo Banco will maintain the efforts towards the reduction of its nonperforming loans (NPL) stockpile along this year, preparing to launch soon the bidding process for another two bad debt portfolios: the projects “Nata 2” and “Viriato 2”.

«Yes, our aim is to close more NPL sales this year», said Novo Banco President, António Ramalho, during the bank’s annual results presentation.

These portfolios arrive into the market a pair of months after the sales completion of projects “Nata” and “Viriato”, which took place in the end of 2018. The larger NPL portfolio to be sold in Portugal ever, Project Nata was divided into two tranches: one with a gross book value of €500 million and other, larger, of €1.2 billion. Besides this, in the same period, the Portuguese bank have also sold its Project Viriato, involving more than 9,000 real estate owned (REO) assets.

Considering the «success» of these «toxic assets» sales, António Ramalho announced that «Yes, we will have the Nata 2 and the Viriato 2», ensuring that this will be another year for the bad debt shrinking.

«We have to do a very clear and precise NPL plan and deliver it to ECB. Its part of our programme», explained the president of the bank which was bought by US’s Lone Star in 2017 after former Banco Espírito Santo collapse in 2014. The goal, stresses António Ramalho, is that «the bank’s NPL ratio reach 5%», in line with ECB’s targets. As for the «bad bank» in which remains the burden legacy of Banco Espírito Santo, the NPL ratio should stand «close to 12%».

As revealed in the same occasion, Novo Bank recorded losses of €1.412 billion in 2018.

Original Story:Jornal de Negócios | Rita Atalaia
Photo: Novo Banco
Translation and Edition: Prime Yield

NPL’s sales from Brazil’s top banks gain momentum in 2019

6 March, 2019

The credit recovery market in Brazil is seen gaining momentum in 2019 with the country’s largest banks expected to put 40 billion Brazilian reais of non-performing loans (NPL) up for sale, Valor Econômico reported, citing forecasts from managers who specialize in bad loan trading

Banks put about 30 billion reais in face value of delinquent loans up for sale in 2017 and 2018 each, according to the report.

The projected uptick is based on Caixa Econômica Federal’s plans to revisit the market this year after a court ruling suspended such sales for the state-run bank in mid-2016. The company is reportedly in the final stages of securing approval to resume the sales.

The strategy of Brazilian banks has reportedly been to partner with managers who specialize in debt recovery and sell the oldest tranches of their nonperforming retail loan portfolios.

In October 2018, Banco Bradesco SA agreed to purchase 65% of asset manager RCB Investimentos SA’s NPL servicing platform in Brazil. In doing so, it joined fellow Brazilian lenders Itaú Unibanco Holding SA, Banco Santander (Brasil) SA and Banco do Brasil SA, all of which either own or have stakes in similar asset recovery firms.

«Selling portfolios is more a matter of efficiency and focus» as opposed to revenue, Valor quoted Eurico Fabri, Bradesco’s vice president of retail banking, as saying.

Although Brazil’s debt recovery market is expected to grow this year, current unemployment levels suggest improvement will only solidify in the years to follow as the country’s economic situation continues to improve.

Original Story: S&P Global Intelligence| David Feliba
Photo: FreeImages.com/CesarFermino
Edition: Prime Yield

Piraeus Bank aims to reduce NPLs by €15 billion until 2021

4 March, 2019

Greek banks still have the highest NPL (non-performing loans) ratio across the euro zone at 44.8%, according to the most recent figures from the European Parliament. And because so, Christos Megalou, CEO of Piraeus Bank, calls on lenders to do more on reducing the country’s bad debt, despite all the significant steps already taken to bring down the level of NPLs.

In an interview to the US media CNBC, the responsible told «the four systemic banks have agreed among themselves to reduce the non-performing loans between now and 2021 by €50 billion. This is almost 28% of the GDP [gross domestic product] of this country. It is a significant percentage vis-à-vis the actual percentage being produced by this country. I would like to see this happening and I would be very happy if we are able to achieve these targets as we have set ourselves out to achieve».

In specific the case of Piraeus, one of Greece’s top banks, the aim is to reduce the NPLs by €15 billion until 2021. This after having reduced bad loans by €5 billion in 2018, the CEO said in Athens.

In the same occasion, the head of Piraeus Bank revealed that there has been strong interest from international funds in buying Greek NPLs. «We had situations where funds were competing and in the process of competition they had to pay a significant amount of money in due diligence to be able to bid for these assets. We are very happy as principal selling those loans of the level of competition and the level of activity we see in the NPL market. I would dare to say that one of the most interesting asset classes in Greece this days is the non-performing loans».

Greece put an end to nearly 10 years of financial help after it ended a third financial rescue in August and has vowed to stick to stringent fiscal targets in the coming years in exchange for some debt relief.

Original Story:CNBC | Silvia Amaro
Photo: Piraeus Bank
Edition:Prime Yield

Portuguese Banks with potential to securitize NPL

13 February, 2019

The Portuguese banks have potential to complete more non-performing loans portfolios securitization operations, following the European trend on using these financial instruments, noted the rating agency DBRS.

According to Alessio Pignataro, Senior Vice President, European ABS – Global Strucutured Finance, Portugal, Ireland and Italy are the countries were DBRS expects the banks to use these financial instruments to reduce a still high volume of non-performing loans (NPL), besides the new entries of Spain, Greece, Cyprus and, potentially, the United Kingdom.

«From a banking perspective, this measure enables faster NPL reduction and frees the management teams to focus on new businesses», Elisabeth Rudman, managing director and head of EU FIG told to Portuguese news agency Lusa, on the sidelines of a DBRS event about the theme in London.

Since 2016, the Portuguese banks completed two deals, a small number when compared to the 20 NPL securitization done by Italian banks and four other by Irish banks during the same period.

One of the Portuguese deals was led by Caixa Económica Montepio Geral when it sold the €580.6 million NPL portfolio “Evora Finance” in 2017, and the other one was closed last year by Santander Total bank, when disposed a €480.7 million NPL portfolio. DBRS rated both transactions “BBB” (low), noting though that “Évora Finance” is performing well above the initial forecast.

The rating agency also states the European Banks have made substantial progresses in reducing the huge NPL pile accumulated since the financial crisis, but several countries whose banks still have huge levels of NPL «still have a long way to go».

Legal and tax reforms were implemented in Portugal to help dealing with this problem but, in general the European banks keep struggling to collect outstanding debts and foreclose mortgages, besides the low yield profitability and pressures over the capital levels.

Original Story:Diário de Notícias | Lusa
Photo: Free Images.com /Alfonso Romero
Edition and Translation:Prime Yield

Novo Banco puts its focus in NPL and Real Estate sales

7 February, 2019

Focused on cleaning its balance sheets and in the reduction of its NPL stock, Portuguese Novo Banco has advanced with the sale of a NPL portfolio worthing €1 billion and of other €500 million in real estate assets.

According the Jornal de Negócios, which quotes Debtwire, the Portuguese bank led by António Ramalho is already receiving proposals from financial advisores for the placement of the real estate portfolio in the market, which is expected to happen still in this quarter. In the race to advise this sale are well known names such as Alantra, Deloitte and PwC, among other. The sales process is expected to be completed by June.

So, after “Project Nata”, a NPL portfolio with a gross book value of €2.15 billion sold last December to a JV from KKR and LX Partners, the bank is now putting for sale the “Project Nata 2”, other NPL portfolio worthing €1 billion.

Also, in progress is the sale of “Project Viriato 2”, a €500 million real estate portfolio consisting mainly of commercial and industrial assets spread in the Lisbon region, writes the same publication, remembering that the disposal of “Projecto Viriato 1” generated a sales result of €388 million.

Original Story: Idealista | Idealista News
Photo: Novo Banco
Translation and Edition:Prime Yield