Piraeus Bank continues to clean up its balance sheet with the sale of bad loans
ATHENS, December 27 (Reuters) – Bank of Piraeus BOPr.AT on Monday announced that it had sold part of its securitized bad debts to Intrum and Serengeti Asset Management as part of its balance sheet consolidation efforts.
Greek banks have cut a large stock of bad loans accumulated during the country’s decade-long financial crisis and are targeting a single-digit bad debt ratio next year.
The transaction is part of Piraeus Bank’s Sunrise transformation program announced in March and follows the closing of its â¬ 7.2 billion Sunrise I securitization.
Piraeus, one of Greece’s four largest banks, said it has sold 44% of the mezzanine notes of its Sunrise II securitized bad debt to Intrum and 7% to Serengeti Opportunities Partners.
The Sunrise II portfolio comprises approximately 47,000 personal and business loans with a gross book value of 2.7 billion euros ($ 3.1 billion).
When announcing the transaction in early November, Piraeus said the implied valuation of the sale, based on the face value of senior bonds and the proceeds from the sale of mezzanine and junior bonds, was 47.4% of the gross book value of the portfolio.
Goldman Sachs Europe and Alantra CPAI have acted as arranger and financial advisers for Piraeus, which aims to achieve a single-digit NPE (Non-Performing Exposure) ratio by early 2022.
Piraeus Bank will retain 5% of the mezzanine and junior ratings of the Sunrise II securitization in accordance with applicable regulatory requirements, as well as all of the senior ratings.
The bank said the capital impact of the sale represented a 50 basis point increase in its total capital ratio in September.
($ 1 = 0.8838 euros)
(Reporting by George Georgiopoulos; Editing by Kirsten Donovan and Alexander Smith)
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