Secondary market for NPLs
The funds that have acquired nonperforming loans from Greek banks have started reselling them, opening the way for the creation of a secondary market of bad loans; this concerns exposures that have already changed hands in the context of securitizations or sales and are now being resold to other funds.
Sources say that the first transaction of this sort, “Project Frame,” is being attempted by Bain Capital, one of the first investment funds to have acquired NPLs from Greek banks. The sale concerns part (estimated at €600 million) of the Icon portfolio Bain acquired in January from National Bank.
The total requirements of the Icon portfolio amount to €2.6 billion, mainly including secured loans taken out by over 1,500 enterprises of all sizes across Greece. The price the package was transferred to Bain for amounted to 21% of the portfolio’s nominal value.
More such transactions are coming, not only for loans sold directly but also for those that have been securitized through the state’s Hercules asset protection scheme, said Intrum Investment managing director Akis Bis. He predicted the secondary market will grow as of 2022.
