NBG clinches deal to sell bad loans to doValue, Bain, Fortress

Credit: REUTERS/Michalis Karagiannis

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ATHENS, Oct 15 (Reuters) - National Bank (NBG) NBGr.AT, one of Greece's largest lenders by assets, has finalised a deal with doValue DOVA.MI, Bain Capital and Fortress to offload a 6.0 billion euro ($6.97 billion) portfolio of non-performing loans, it said on Friday.

NBG said it is selling 95% of the mezzanine and junior notes from a securitisation backed by a portfolio of non-performing exposures (NPEs) with a total gross book value of about 6.0 billion euros, known as the Frontier portfolio.

It will retain 100% of the senior notes of the securitisation, making use of the government's asset protection scheme known as Hercules, and 5% of the mezzanine and junior notes.

The use of the Hercules scheme - launched in October 2019 to help Greek banks offload bad loans by turning bundles of impaired credit into asset-backed securities that can be sold to investors - will allow the lender to offload the entire portfolio.

The sale is part of NBG's efforts to shrink its NPEs and is in line with targets it has submitted to the European Central Bank in its supervisory role over EU lenders, it said.

Proceeds of the deal for NBG reflect the state guarantee for the senior notes gained through the Hercules scheme plus the consideration for the mezzanine and junior notes, it said.

That corresponds to about 50% of the total gross book value of the Frontier portfolio, it added, without giving a figure.

The transaction will boost NBG's total capital by about 150 basis points, with its first-half total capital ratio increasing to 18.5%. Its NPE ratio stood at 12.7% at the end of June, it said.

It is expected to be completed within the fourth quarter, subject to required approvals.

Credit servicer doValue Greece will undertake the servicing of the Frontier portfolio. Morgan Stanley advised NBG on the deal, with Oliver Wyman acting as technical advisor.

($1 = 0.8611 euros)

(Reporting by George Georgiopoulos; Editing by Jan Harvey)

((angeliki.koutantou@thomsonreuters.com; +30 2102214608; Reuters Messaging: angeliki.koutantou.reuters.com@reuters.net))

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