NPLs
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Wholesale switch
Creval eyes NPL reduction strategy
Credito Valtellinese (Creval) has announced a five-year business plan that aims to reduce its non-performing loan and sovereign exposures and improve profitability via cost-cutting. The successful execution of the plan would make the bank more attractive for a possible merger in the future, in line with supervisory calls for reductions in NPL exposures as well as consolidation, in order to .......
News 28 June 2019
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ReoCo impact assessed
Company hires and sector developments
CMIP acquisition
Investcorp Credit Management US has entered into a definitive interest purchase agreement to acquire a majority ownership interest in CM Investment Partners (CMIP), the investment adviser to CM Finance, through its purchase of the respective equity positions held by certain funds managed by Cyrus Capital Partners and Stifel Venture Corp, and newly issued interests in CMIP. .......
Market Moves 28 June 2019
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Compliance challenges
STS requirements raise regulatory liability concerns
The securitisation market now appears to be embracing the new Securitisation Regulation and adapting to the regime, following uncertainty over technical standards in Q1. Nevertheless, market participants are still grappling with practical challenges, whose solution remains elusive.
According to Salim Nathoo, partner at Allen & Overy: “Filling in the CRE and residential templates is hard because it’s not .......
News Analysis 28 June 2019
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Setting standards?
NPL templates simplified
Debitos has further developed and simplified the EBA’s NPL templates without altering their basic structure. The EBA’s templates are not yet binding, but Debitos assumes that they will be at some point, as the supervisor is readying guidelines that will allow servicers to incorporate the templates into their reporting systems.
Debitos ceo Timur Peters notes: “We see the .......
News 17 June 2019
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Collections eyed
Distressed investors expect secondary market boost
Distressed investors are anticipated to become more aggressive in generating cash and overcome the significant complexity associated with on-boarding and servicing tens of thousands of non-performing loans. The move is in light of some rated NPL securitisations performing below business plan expectations in terms of collections.
According to Mario Cortesi, head of distressed credit and structured finance at Quaestio Capital: “Since 2016, volumes .......
News Analysis 17 June 2019
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Deleveraging continues
UniCredit expands NPL ABS programme
UniCredit has expanded its Sandokan non-performing loan ABS programme. While the transaction is being carried out for asset management purposes, deconsolidation is expected to be achieved at some point, with the bank aiming for a gradual approach in order to mitigate the P&L impact of the deleveraging.
The transaction involves the transfer of management and special servicing activities .......
News 7 June 2019
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JV announced
Intrum acquires Piraeus platform
Intrum is set to purchase Piraeus Bank’s servicing platform, which will be hived-off into a separate €410m legal entity dubbed NewCo. The transaction is Intrum’s first such acquisition in Greece and follows its joint venture with Intesa Sanpaolo last year and similar acquisitions in Italy (SCI 14 December 2018).
Intrum will fully consolidate the entity and own .......
News 4 June 2019
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Pillar prepped
Public Greek NPL ABS debuts
DBRS has provided the first public rating for a non-performing loan securitisation in Greece as the market awaits European Commission approval for the HFSF’s asset protection scheme. Dubbed Pillar Finance, the transaction is backed by a €2bn portfolio of principally secured residential mortgage NPLs.
Alessio Pignataro, svp at DBRS, notes: “The transaction has a double-B rating, so it .......
News Analysis 31 May 2019
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NPL securitisations eyed
Fire, StormHarbour JV granted license
Greek authorities have granted a license to EuPraxis, the joint venture between Italian servicer Fire and StormHarbour. It is the first cross-asset licence for an independent servicer and non-performing loan securitisation will be a key area of focus.
George Kofinakos, md at StormHarbour and chairman of the board at EuPraxis, states: “Fire and StormHarbour have decided to combine .......
News Analysis 31 May 2019
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LeaseCo boost
Foundation laid for leasing NPL ABS
Amendments to Italy’s securitisation law are expected to boost securitisations of non-performing leasing assets, with at least two transactions being readied for this year. Leasing NPL securitisations are rare, with the underlying assets of most NPL ABS being either corporate or SME loans.
Annalisa Dentoni-Litta, partner at Orrick, explains: “The amendments allow for the creation of ancillary SPVs .......
News Analysis 24 May 2019
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Real estate upside
National Bank of Greece opts for NPL ABS
The National Bank of Greece intends to securitise €3bn of non-performing mortgage loans by 2022. The securitisation option would allow the bank to benefit from any real estate upside and follows revelations of a government programme for the subsidising of mortgage NPL payments (SCI 22 February).
“Securitisation would allow the bank to retain some senior exposure and therefore benefit .......
News 20 May 2019
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Promising prospect
Synthetic UTPs contemplated as IFRS 9 hedge
Synthetic securitisations referencing unlikely-to-pay loans are a more promising prospect than synthetic securitisations of NPLs, given their potential as an IFRS 9 hedge, according to panellists at SCI’s recent NPL securitisation seminar in Milan. However, regulatory challenges and the issue of defining UTPs and credit events remain open questions.
One regulatory challenge is that, under current regulations, synthetic .......
News Analysis 17 May 2019
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Seeking refuge
NPL securitisation disclosed
Hoist Finance has confirmed in its latest 2019 interim report that it will securitise part of its non-performing loans, due to regulatory demands for higher risk weights for purchased defaulted assets. The securitisation option is unusual for debt collectors, given that they have to surrender some of the upside on their defaulted assets to third-party investors and - unlike .......
News Analysis 16 May 2019
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SCI Start the week - 13 May
A review of securitisation activity over the past seven days
Transaction of the week
Last week saw an unusual Irish CMBS hit the European pipeline, from debut issuer Finance Ireland. Dubbed Pembroke Property Finance, the €228.6m transaction is backed by 139 loans on 244 seasoned small CRE loans located across Ireland and originated by Finance Ireland Credit Solutions.
Finance Ireland is jointly owned by the Ireland Strategic Investment Fund, Pimco .......
News 13 May 2019
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NPL securitisation inked
Portuguese issuer returns to market
Caixa Montepio Geral has returned to the market with its second NPL securitisation, dubbed Gaia Finance. Unlike some NPL securitisations, the €70m deal features an SPV that purchases the pool, so the seller isn’t the originating bank.
Provisionally rated by Moody’s and DBRS, the transaction consists of €47.5m Baa3/BBB (low) rated class A notes, €7.6m Ca/CCC rated class B notes and €15m .......
News 8 May 2019
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NPL acquisition completed
Hoist Finance purchases Getback portfolio
Hoist Finance has acquired a PLN400m non-performing loan portfolio from Polish servicer Getback. Over 95% of the assets are non-performing unsecured consumer loans, but a small proportion comprises secured consumer and SME loans. The acquisition concides with a wave of banking sector consolidation that is fuelling a growing supply of unsecured retail NPLs in the jurisdiction.
According .......
News 3 May 2019
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Line-up finalised
NPL event includes UTP workshop
The line-up for SCI’s 2nd Annual NPL Securitisation Seminar on 13 May has been finalised. Hosted by Orrick at Corso di Porta Romana 61, Milan, the event features a Distressed Technologies workshop highlighting new models of credit management in the unlikely-to-pay (UTP) loan sector.
Another seminar highlight is a panel on NPL investment trends, which focuses on emerging opportunities, .......
News 3 May 2019
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Global opportunities
Cerberus completes first dedicated NPL fund
Cerberus has closed a US$5.1bn dedicated non-performing loan fund. Dubbed Global NPL Fund, it targets NPL opportunities across the globe, as concerns regarding the late stages of the credit cycle continue to grow.
According to Massimo Famularo, board member at Frontis NPL: “Cerberus is clearly recognising that the NPL market is a global opportunity, with a convenient risk/reward profile .......
News 25 April 2019
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Foreclosure uncertainty
ECJ ruling leaves Spanish NPL investors in the dark
The European Court of Justice’s (ECJ) 26 March judgement on early-termination clauses in Spanish consumer mortgage contracts could result in the use of quicker mortgage foreclosure proceedings in Spanish non-performing loan transactions. The final outcome rests with the Spanish courts, however, prolonging existing uncertainty over the course and length of Spanish foreclosure proceedings.
Antonio Casado, analyst at Scope, .......
News 12 April 2019
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BWIC boom
Quarterly SCI data update
The first quarter of a year is usually quieter than the previous quarter and, for the most part, 1Q19 saw reduced activity over 4Q18 (SCI 24 January 2019). The notable exception was CLO secondary markets, where BWIC volumes boomed for the second quarter in a row, according to SCI data.
....... News Analysis 11 April 2019
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Real estate relief
NPL provisioning rules published
The European Council of Ministers has adopted new rules for the provisioning of non-performing loans, which stipulate loss coverage for future NPLs with different coverage requirements depending on different NPL classifications. The text is a relief for Italian banks, given the application of the rules to newly created NPLs - both secured and unsecured. Furthermore, an exception to the .......
News Analysis 10 April 2019