ATHENS, October 11 (Reuters) – Eurobank (EURBr.AT), one of Greece’s four largest lenders, has signed an agreement with doValue credit department (DOVA.MI) to sell part of the mezzanine and junior notes amounting to 5.2 billion euros ($ 6 billion) securitization of non-performing loan portfolios, he said on Monday.
Greek banks are cleaning their balance sheets of NPLs through outright sales and securitizations with the aim of achieving single-digit NPLs next year to bring them closer to eurozone averages.
The portfolio of non-performing loans, dubbed Project Mexico, has a gross book value of 3.2 billion euros and doValue
will service bad loans.
The transaction is expected to be finalized by the end of December under certain conditions, including the release of a ministerial decision to include Mexico’s securitization in the government’s Hercules II bad debt reduction program.
Eurobank said non-performing Mexican securitization loans will be reclassified as “held for sale” in the third quarter.
The finalization of the sale of the Mexican banknotes and the derecognition of the Mexican loans will take place in the fourth quarter of this year.
The transaction will not have a significant impact on Eurobank’s regulatory capital ratios and its NPE (non-performing exposures) ratio should stand at 7.3%.
Alantra Corporate Portfolio Advisors International advised Eurobank on the sale.
($ 1 = € 0.8633)
Reporting by Angeliki Koutantou and George Georgiopoulos; Editing by Edmund Blair and Louise Heavens
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