Project Cairo

Jun 2020

Co-arranger & Manager – Securitisation - Mixed NPL

Value €7.5 billion

Athens – Acting as Co-arranger and financial lead advisor to the deal, Alantra Corporate Portfolio Advisors International, a leading global investment bank and asset management firm, is pleased to announce that its client, Eurobank Ergasias S.A. (“Eurobank”), has  now closed its second public NPL securitisation in Greek market, Project Cairo.

Project Cairo, the largest Greek NPL securitisation to-date, with the total GBV of €7.5bn is comprised of non-performing multi-asset loans at varying stages of restructuring and enforcement processes. This is also the first securitisation that is enrolled to the Hellenic Asset Protection Scheme (“Hercules”), the Greek government guarantee scheme, for the amount of €2.4bn.

The key components of Cairo transaction are the following:

• Cairo SPV issued 3 classes of Notes’ notional amounts as per following: Senior Note €2.4 billion, Mezzanine Note €1.4 billion and Junior Note €3.6 billion.  The Cairo transaction’s parameters have accounted for the estimated cost of Hercules and are subject to the targeted rating confirmation.
• Eurobank retains 100% of Senior Notes and has acquired approval for Hercules. Furthermore, it retains 5% of Mezzanine and Junior Notes to comply with risk retention requirements.
• 20% of Mezzanine Securitisation Notes and 50.1% of Junior Securitisation Notes are sold to doValue S.p.A., the leading NPL servicer in Italy, for a consideration in cash of €15 million.
• 75% of the Mezzanine Notes and 44.9% of the Junior Notes are distributed as dividend in kind to shareholders.

The transaction took place in parallel with the disposal of the 80% of FPS to doValue, which – adding FPS to its existing business in Italy and Spain – is set to establish itself as the top loan servicer and REO manager in South Europe. The Bank has recently sold portfolio Pillar to PIMCO, which will be also serviced by FPS along with the remaining performing and non-performing exposures that are still retained by Eurobank.

The parties closed the Europe and Cairo transactions, having obtained all the relevant regulatory approvals in line with market practice.

With this milestone agreement, Eurobank enters the final stages towards completion of its accelerated plan announced in November 2019 for the clean-up of its balance sheet and becomes the first Greek bank to turn the corner on the major legacy issue of the NPE stock. Together with Pillar, they are the first NPE securitisations in Greece and key components of Eurobank’s frontloaded NPE reduction strategy, which aims to achieve the targeted NPE ratio of below 15.6%.

Vasilis Kosmas, Partner of Alantra, added: “This transaction represents a landmark deal for the Greek Market, the inaugural NPL securitisation to opt-in for the new Hercules asset protection scheme. We are proud to have played an instrumental part in it. We are grateful for the trust that Eurobank placed in us in supporting them over the last few months”