Novo Banco sells €2.1Bn in NPLs

 In Banks

Portugal’s Novo Banco, created in 2015 from the collapse of Banco Espirito Santo, has successfully offloaded a portfolio of Non-Performing Loans worth €2.1Bn.

The portfolio containing 102,000 contracts worth the €2.1Bn has been purchased by the investment funds KKR and Lx Investment Partners. The process should be completed in the first half of 2019 states the bank in a communiqué to the stock market commission CMVM.

The statement reads, “Novo Banco informs that after the completion of a competitive sale process, Novo Banco and Best have signed a purchase and sale contract for Non-Performing Loans (NPL’s) and related assets (Project Nata) to a consortium of funds managed by KKR and LX Investment Partners.

The portfolio comprises around 102,000 contracts worth a total of €2.1Bn subject to the usual adjustments made in such transactions.”

The sale, originally announced in mid-December, is the largest sale of Non-Performing Loans ever in Portugal.

However, the actual value of the portfolio is greater than the €1.7Bn initially estimated, in other words an additional €400 million.

Taking into account the value now published by Novo Banco, the amount of loan defaults on the bank’s books should fall to around €6.3Bn from the €6.7Bn it has been before the sale of this tranche of debt.

In addition to Project “Nata”, the bank led by António Ramalho is now preparing to sell a second credit default portfolio Project ‘Albatros’ in Spain. This is a collection of NPLs with an estimated value of €400 million in an operation that should be completed by the end of the year.

Novo Banco also has sold a portfolio of 9,000 properties to the US fund Anchorage Capital Group for €716 million with the management of the portfolio handed to the servicing group Finsolutia and Hipoges.