Apollo expected to emerge as winner of €3b Cyprus NPL portfolio

US group Apollo Global Management is expected to be announced as the winner of a non-performing loan portfolio with a nominal value of around €3 bn being sold by the Bank of Cyprus, well-informed market sources confirmed to PropertyEU.

Bank of Cyprus, the island’s largest lender, has postponed the announcement of its first-half financial results to today as it is believed to be edging closer to a deal with the New York-based public equity group.

Apollo declined to comment.

The lender has been in contact with a number of investment funds for the past three months on the sale of an initially much larger portfolio known as Project Helix representing Bank of Cyprus’ entire non-performing exposures with the exception of its bad consumer loans.

PropertyEU reported in May that the lender was testing investors’ appetite on a massive package with a nominal value of €7 bn.

According to well-informed market sources, over 50% of the portfolio is secured against commercial and residential assets as well as plots of land across the island. Corporate and other unsecured loans make up the balance. In addition to the bad loans, the lender is also looking to divest the management platform with around 350 employees.

The size of the deal compared to the island’s economy was seen as the main stumbling block in the sale process which is being managed by Morgan Stanley.

Over the past few months, Bank of Cyprus had to reduce the size of the portfolio sale twice to less the half the initial value to be able to go forward with the transaction.

News agency Bloomberg first reported last week that Apollo was to be selected as preferred bidder for the process.


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