New York-based Fortress's Milan-listed financial arm, doValue has emerged as the winner of a major NPL portfolio and asset manager in Greece.
Lender Eurobank has agreed the sale to DoValue of both an 80% stake in its Eurobank Financial Planning Services (FPS) platform under a sale codenamed Project Europe as well as of a portion of mezzanine and junior securitization notes of the €7.5 bn multi-asset NPE package known as project Cairo.
Italian NPL servicer doValue offered €360 mln for the assets, compared to an initial asking price set by Eurobank at €500 mln.
Under the agreement, Eurobank has signed a 10-year servicing contract with FPS for the servicing of €5.6 bn of Eurobank’s NPE and €5.7 bn of Eurobank’s retail early arrears. In addition, FPS - the largest management company in Greece - will manage the €2 bn residential mortgage NPE securitization known as project Pillar as well as the Cairo securitization and third party mandates from international investors reaching a total of €26 bn.
With regards to Project Cairo, DoValue's price for its share of junior and mezzanine notes corresponds to 33.3% of the total gross book value of the securitized portfolio. Eurobank will retain 100% of senior notes and will opt-in for the Hercules asset protection scheme. Cairo's senior, mezzanine and junior notes amounts to €2.4 bn, €1.5 bn and €3.6 bn, respectively.
The parties aim to close the transactions by end Q1 2020.
Eurobank CEO Fokion Karavias said: 'With this milestone agreement, we are entering the final stages towards completion of our accelerated plan for the cleanup of our
balance sheet. As Eurobank delivers on its plan, it becomes the first Greek bank to turn the corner on the major legacy issue of the NPE stock.'
He added: 'We are already focusing now on financing the growth of the economy in Greece and the region and delivering returns for our shareholders of close to 10% ROE. We are delighted for an agreement and the beginning of a long-term partnership with 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.'
PropertyEU reported last month that Eurobank had re-opened negotiations with DoValue for the sale after an exclusivity agreement with Pimco lapsed on 30 September. Pimco, a unit of German conglomerate Allianz, in June had secured exclusivity in the Project Cairo/Europe processes with a €310-€320 mln bid.
Also this week, New York-based Fortress emerged ahead of rival Bain Capital in the running to acquire a €1.9 bn non-performing loan portfolio in Greece. The investor is believed to be offering €450 mln, or 24 cents on the dollar, for the Neptune package of soured loans which are backed by around 4,000 assets in Greece.
The portfolio is said to be more granular and less attractive than previous NPL packages for sale. One source familiar with the transaction said that Bain – which last year bought the Amoeba NPL portfolio at a higher price - was hesitant to sharpen its pencil too much against a new-comer.
The group was shortlisted together with Bain by Greek lender Alpha Bank last month to put forward a binding offer for the assets.