Creval completed a securitization deal that will allow the deconsolidation of 1.4Bn NPL. As stated in this previous post this deal is a further evidence that there is actually no need of Public Asset Management Companies in order to facilitate NPL portfolio disposal.
The Creval deal (here the press release for further details) will produce an improvement of the gross NPL ratio from 27.2% as at 31 March 2017 to an estimated 21.2% as at 30 June 2017 and will be structured with
- a global trasfer price of 34.7% of GBV
- a EUR 464 million senior tranche, with expected rating consistent with the requirements of the legislation on the state guarantee (“GACS”);
- a rated EUR 42.5 million mezzanine tranche, sold at €21.25mn to an investor at a capital loss
- a EUR 20 million junior tranche, sold at zero at an investor.
The senior tranche notes, having a Eu6m + 50bps return, are expected to be covered by the GACS – to be formalised by the MEF in the next few days -, and entirely retained by the Originators, whereas the mezzanine and junior tranches were placed with an institutional investor at the outcome of a competitive bid.
Even though the mechanics of the sale may somehow be questioned (1.4bn are being offloaded from balance sheet with only 21.25m capital injection form a third party) the bottom line is that the state guarantee is enough to make sustainable deconsolidation possible and there is actually no need of public sponsored Asset Management Company that acquire NPL at higher than market average prices.
GLG – Gerson Lehrman Group – Council Member