Alpha Bank in talks with Cerberus and PIMCO to sell $ 11 billion in bad debt: sources
LONDON / ATHENS (Reuters) – Alpha Bank of Greece ACBr.AT is in talks with at least five U.S. investment firms, including Cerberus and PIMCO, in a further attempt to get rid of a bad debt portfolio worth more than € 10 billion ($ 11.3 billion dollars), two sources told Reuters.
The portfolio, known as Galaxy, consists of retail loans worth € 7.6 billion and loans to medium and large corporate clients worth € 3 billion, it said. the first source.
Alpha, Greece’s fourth-largest bank, could earn between € 400 million and € 500 million from the sale, the second source said.
Alpha kicked off the process, which includes the sale of the Cepal loan service platform, earlier this year, but halted negotiations when the coronavirus crisis hit.
He asked bidders to submit provisional bids by June 29, the second source said.
Bain Capital Credit and Apollo are looking to join the race, alongside U.S. investment firm Centerbridge, which recently agreed to sell its 60% stake in Cepal to Alpha, the sources said.
Cerberus and Bain declined to comment. Alpha Bank, PIMCO, Centerbridge and Apollo were not immediately available for comment.
The sale is the most significant attempt by a Greek bank to clean up its balance sheet since the coronavirus crisis forced lenders to suspend transaction plans.
If successful, the deal could revive non-performing loan (NPL) assignments in southern Europe where Greek and Italian lenders have sought bidders for billions of euros in bad debt.
Alpha aims to sign a deal by the end of the year, the first source said. The process is expected to accelerate after the summer and end in the fourth quarter.
National Bank of Greece NBGr.AT is expected to follow suit with the sale of its Frontier wallet while Piraeus Bank BOPr.AT is preparing two securitizations of bad debts for a total amount of 7 billion euros, the sources said.
A source close to Piraeus said the bank plans to take advantage of the government’s Hercules bad debt reduction program to smooth the sale of two portfolios, known as Project Vega and Project Phoenix, with loans of respective value. of 5 billion and 2 billion euros.
Alpha Bank is seeking to apply this year to the Hercules device, which provides state guarantees on senior securitization tranches, after the Galaxy divestiture is finalized, the first source said.
Reporting by Pamela Barbaglia in London and George Georgiopoulos in Athens; Editing by Edmund Blair