In a landmark transaction, Milbank LLP advised Piraeus Bank S.A. (“Piraeus Bank”) and Piraeus Financial Holdings S.A. (“Piraeus Holdings”) on the securitisation, known as Project Vega, of a portfolio of non-performing exposures (“NPEs”), comprising residential mortgages, SME and CRE debt, with a total gross book value of approximately €4.9 billion ($5.88 billion).
Project Vega comprises three securitisations, split according to portfolio composition, and intends, subject to regulatory approvals, to achieve approval under the Greek "Hercules" asset protection scheme pursuant to which the most senior tranche of notes of each securitisation, to be initially retained by Piraeus Bank, will be guaranteed by the state.
Cementing the strategic partnership which commenced in 2019 with the joint establishment of a leading servicer in the Greek market, Intrum Hellas, Intrum AB (publ) have agreed to enter into a binding commitment with Piraeus Holdings to purchase 30% of the mezzanine and junior notes, with Piraeus Holdings contemplating the distribution of 65% of the mezzanine and junior notes to its shareholders. Piraeus Bank will retain 5% of the senior, mezzanine and junior notes for European “skin in the game” purposes.
Together with Project Phoenix, the transaction will reduce the bank's ratio of NPEs to 36% from 47% in September 2020 and is a key component in its efforts to decrease its NPE stock in accordance with ECB guidance.
The Milbank team was led by Global Leveraged Finance/Capital Markets partner Apostolos Gkoutzinis and Alternative Investments Practice partner James Warbey, supported by associates Martin Brennan and Melanie Probst.
