Greece’s creditors insist that online auctions of properties that are not the main residence of debtors need to resume as soon as the lockdown ends.
The view expressed during talks on Tuesday with the government echoed the opinions voiced by the banks and the companies managing bad loans for the funds that have acquired them. Their view is that the horizontal freeze on auctions puts loan securitizations at risk while also raising the possibility of triggering state collateral consequences in the context of the Hercules asset protection scheme.
The government has decided on a horizontal suspension of auctions, regardless of whether the asset liquidations are the outcome of the new economic crisis. The measure is affecting the business plans of the servicers who have undertaken the Hercules-related loans.
Banks and servicers have requested a resumption of auctions for industrial properties of companies that have not been given state protection due to the pandemic, as well as for high-value residential assets that are not covered by the protection provisions of the Gefyra program concerning borrowers’ main residences.
The creditors’ senior representatives expressed their agreement with the expansion of the Gefyra program so as to subsidize the repayment of loans taken out by companies that the pandemic has hurt. The creditors said the subsidies will have to cover the companies that have a genuine need based on their turnover. While the criteria for the subsidy’s calculation will be determined soon, the level of support each company has received to date from the various government measures will be a key factor.
Sources say the subsidy level will reach a maximum rate of 90% and will be reduced during the subsidizing period, along the lines of the Gefyra program. A necessary condition for state subsidies is that the enterprises that benefit from them must reach an arrangement with the banks regarding their debts.
The talks also included the change to the charter of the Hellenic Financial Stability Fund so that it will have the right to participate in future share capital increases.