Alantra advised Piraeus Bank on the first synthetic STS securitisation of shipping exposures

Sep 2022

Securitisation – Sole arranger and financial advisor

Value 0.7 billion

Athens – Acting as sole arranger, Alantra, the global investment banking firm and asset management specialist, is pleased to announce that its client, Piraeus Bank S.A. (“Piraeus” or the “Bank”) entered into binding agreements for the first synthetic STS securitisation of performing shipping loans in Europe, with a total aggregate GBV of $0.7bn.

The Bank has entered a financial guarantee with a special purpose vehicle acting as the Protection Seller buying protection from losses on a mezzanine tranche. The risk on other tranches has been retained by the Bank. The originator also retains 5% of the total portfolio to comply with regulatory risk retention requirements.

The Protection Seller issued notes to the Investor and used the proceeds to purchase eligible collateral to secure its obligations under the guarantee and the notes. The deal has a two-year revolving feature allowing the Bank to replenish amortised loans and the Bank has a time call option after 4.8 years. The transaction uses pro rata amortisation that switches to sequential if certain performance triggers are breached.

The deal meets the criteria of synthetic STS securitisations set out in Articles 26b to 26e of EU Regulation 2017/2402 as amended by EU Regulation 2021/557.

The originator has received approval that the transaction transfers significant risk and meets the simple, transparent, and standardised criteria (STS) leading to a reduction of RWEAs of c. €0.4bn.

Auld Partners, a boutique shipping finance firm based in London, acted as Alantra’s expert advisor providing specialist advice related to shipping and the shipping finance market.

Vasilis Kosmas, Partner at Alantra, stated: “Piraeus Bank has brought yet another landmark transaction to the market in a challenging environment, a testament to the quality of the Bank’s lending across different asset classes and its ability to manage its risk and capital positions.”

Holger Beyer, Managing Director at Alantra, commented: “Shipping finance has had a volatile performance history in the past, which is why we are excited about opening the synthetic securitisation market for this asset class.  This transaction paves the way for banks to manage the risks and capital requirements of ship lending more effectively in the future.”