The secondary market for non-performing loans (NPL) is thawing after a long period of stagnation, with servicers having 12 transactions ready for the sale of loans with a Gross Book Value of 3 billion euros.
According to information from Euro2day.gr, within the fourth quarter, sales of packages with securitized and non-securitized loans to investment companies, mainly funds, are expected to take place.
Return “slice”
The venture also hides a small surprise, as from the total of these loans, a “slice” worth 100-150 million euros will be sold to the banks, essentially constituting the first act of returning “cured” loans to the banking system.
The packages of 100-150 million euros intended for return to the banks consist, as the same sources explain, mainly of mortgage loans. It is recalled that the institutional framework for the return of cured loans to the banks provides that each bank may buy loans that did not belong to it in the past.
The groundwork
The servicers have carried out, each based on the priorities of its portfolio, the preparation and, according to industry sources, the first transactions will be launched within October.
“There had been groundwork for certain packages over the previous two to three years, however conditions did not allow the final implementation of the transactions,” they stress to Euro2day.gr.
Given that the market has changed behavior -the assets have gained value- they judge, also based on the expressed interest from funds, that this is now the appropriate period for the operation of the secondary market to begin dynamically, with the ultimate goal of reducing the volume of these portfolios.
The packages for sale (corresponding to twelve transactions) include non-performing securitized or non-securitized loans from all categories: consumer, small and medium-sized business, and mortgage, with several of them carrying notable assets as collateral.
“The secondary market makes it possible through the resale of non-performing loans to gradually ‘clean up,’ depending on buyer interest, the large pool of NPLs,” the same sources conclude.