Alpha Bank in deal to sell bad loan notes to Davidson Kempner entities

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ATHENS, Oct 22 (Reuters) - Alpha Bank ACBr.AT, one of Greece's four biggest lenders, said on Friday it entered into a binding agreement to sell 51% of mezzanine and junior bad loan securitisation notes to entities managed and advised by Davidson Kempner.

The securitisation notes relate to a portfolio of non-performing credit with a gross book value of 3.4 billion euros ($3.96 billion) named 'Cosmos', which is part of efforts to de-risk its balance sheet from non-performing loans.

Alpha Bank said it will retain 100% f the securitisation's senior notes and 5% of the junior and mezzanine notes, "in line with risk retention requirements". Cepal Hellas will be the credit servicer of the Cosmos securitisation.

Total proceeds from the sale of 51% of the junior and mezzanine notes, along with the value of the senior notes correspond to about 50% of the portfolio's gross book value, Alpha Bank said.

"The Cosmos transaction is expected to be capital adequacy neutral, as the incremental profit and loss charge of 0.3 billion euros is in line with the group's guidance for NPE (non-performing exposures) transactions," the bank said.

The sale is expected to be completed in this year's fourth quarter.

It will be counterbalanced by capital relief from lower risk-weighted assets.

($1 = 0.8595 euros)

(Reporting by George Georgiopoulos; Editing by Emelia Sithole-Matarise)

((george.georgiopoulos@thomsonreuters.com; +30210 337 6437; Reuters Messaging: george.georgiopoulos.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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