Piraeus to sell bad debt notes to Intrum, Serengeti

Piraeus Bank said on Monday it had agreed to sell some of its bad debt to Intrum and Serengeti Asset Management as part of efforts to clean up its balance sheet.

Piraeus said that under the deal, it had agreed to sell 49% of the mezzanine and 2% of the junior notes of its Sunrise II securitized bad debt portfolio.

The Sunrise II portfolio comprises around 47,000 loans to individuals and businesses for a gross book value of 2.7 billion euros.

The implied valuation of the sale, based on the face value of senior notes and the proceeds from the sale of mezzanine and junior notes, is 47.4% of the gross book value of the portfolio, the bank said.

Goldman Sachs Europe and Alantra CPAI acted as arranger and financial advisor to Piraeus Bank.

The transaction is part of Piraeus Bank’s Sunrise transformation program announced in March and follows the closing of its € 7.2 billion Sunrise I securitization.

Piraeus aims to achieve a single-digit non-performing exposure ratio by early 2022.

In August, he called for the inclusion of senior Sunrise II bonds in the government’s Hercules bad debt reduction program, which means that the Greek state will guarantee € 1.2 billion of senior bonds in the securitization.

Subject to required approvals, Piraeus plans to remove Sunrise II loans from its consolidated financial statements in the fourth quarter.

He said the transaction would be classified as “held for sale” from September 30, reducing the Piraeus Bank’s NPE ratio to around 17%, from 45% in December last year.

The expected capital impact of the sale is around a percentage point compared to June’s total capital ratio, he said.

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