SmithNovak’s Post

📰 𝗜𝗡𝗗𝗨𝗦𝗧𝗥𝗬 𝗡𝗘𝗪𝗦, 𝗣𝗢𝗥𝗧𝗨𝗚𝗔𝗟: Alternative Asset Manager Balbec Acquires €4 Billion in NPLs from LX Partners Alternative asset manager Balbec Capital Management has bought a portfolio worth over €4 billion ($4.4 billion) of soured Portuguese loans from Luxembourg-based LX Partners, according to a statement seen by Bloomberg News. The portfolio has more than 300,000 restructured and non-performing loans, and its purchase is one of the largest such loan transactions in recent years, Balbec said. It’s one of the biggest portfolio purchases of non-performing loans for the firm since it was founded in 2010. About two-thirds of the portfolio consists of unsecured debt, such as loans to small and medium-sized businesses, according to Balbec. The secured portion, which is one-third of the portfolio, consists of residential mortgages and other real estate loans. 🇬🇧 Read the full article in English ➡ https://lnkd.in/e-Qu6nKW 🗞For more industry news, subscribe to our newsletter ➡ smithnovak.com/news 📝Browse our library of industry reports ➡ smithnovak.com/reports 📅To learn more about NPL activity in the Portuguese market, as well as around the globe, join us at SmithNovak's 6th annual 𝗡𝗣𝗟 𝗚𝗹𝗼𝗯𝗮𝗹 summit, returning to London on 2-3 October 2024 ➡ https://lnkd.in/e62MJcRa #NPL #NPE #NPA #DistressedDebt #Nonperformingloans #Nonperformingassets #Portugal

📈Compared to 2023, the overall sentiment in the corporate CLO market has turned optimistic. U.S. Issuance sits around $93 billion, with strong issuance in the refinance/reset area. In Europe, issuance has reached €22.7 billion, only €4 billion short of the total issuance volume in 2022 and 2023. The carry remains strong in the corporate CLO market, even with tight paper, which continues to attract investors. The market is also recycling from called deals, as investors who exited due to amortization are keen to re-enter and deploy capital again. Read Trepp's latest update on the global corporate CLO market👉 https://hubs.li/Q02BKZy30 #Trepp #TreppCLO #CollateralizedLoanObligations #CLO #CorporateCLOs #EuropeanCLO #USCLO #GlobalABS

CLO activity in Europe during the third quarter was around EUR 22 bn, almost equally split between resets/refinancings and new issuance. For the full year, European new issue volume will certainly reach a record for the 2.0 era and likely surpass EUR 40 bn, with more than 50 managers coming to market this year, which would also be a record. Activity in the underlying leveraged loan market has also been busy, but mostly driven by opportunistic transactions where borrowers extend, refinance or reprice their debt. New loan deals from M&A activity are growing in proportion but remain in deficit to demand. As a result, 40% of the secondary loan market currently trades above par, leading to a third repricing wave of outstanding loans this year. With new CLO creation at a record and older CLOs continuing to pay down as loans are refinanced, the strong technical development across leveraged loan and CLO markets looks set to continue through to year-end.

📰 𝗜𝗡𝗗𝗨𝗦𝗧𝗥𝗬 𝗡𝗘𝗪𝗦, 𝗦𝗣𝗔𝗜𝗡: Sareb sells a loan portfolio worth €1.5 billion to Axactor The Asset Management Company from Bank Restructuring (Sareb) has reached an agreement with the Norwegian Axactor to sell a portfolio of 1.5 billion euros in failed loans to real estate developers, as market sources have informed Europa Press. The 1,500 million is the nominal value of the loans that make up the portfolio. The sale price has not been disclosed, but in this type of transaction it is always much lower due to the difficulties in recovering all of the debts, as reported by the newspaper 'Cinco Días'. According to the sources consulted by Europa Press, this sale is part of Sareb's strategy of getting rid of assets that do not have any type of mortgage guarantee to back them. "They are very unproductive assets that are on the balance sheet and that generate expenses," they indicate. Spain is the first market for the debt management company Axactor, representing 39% of its income and 28% of its bad loan portfolio. 🇪🇸 Read the full article in Spanish ➡ https://lnkd.in/eWSHWdgB 🗞For more industry news, subscribe to our newsletter ➡ smithnovak.com/news 📝Browse our library of industry reports ➡ smithnovak.com/reports 📅To learn more about NPL activity in the Spanish market, as well as around the globe, join us at SmithNovak's 6th annual 𝗡𝗣𝗟 𝗚𝗹𝗼𝗯𝗮𝗹 summit, returning to London on 2-3 October 2024 ➡ https://lnkd.in/e62MJcRa

In her latest blog, Pauline Quirin, Portfolio Management highlights the remarkable appetite investors are currently showing for mezzanine ABS bonds, exemplified by the the recent consumer loan ABS issued by Consors Finanz, a fully-owned subsidiary of BNP Personal Finance. The Noria 2024-DE1 deal, with a €800m portfolio of German fixed rate amortising consumer loans, was oversubscribed 8-10 times. Despite summer slowdowns, European ABS demand remains strong, driven by attractive yields and banks seeking funding and capital relief. Read more here: https://okt.to/ymoCQl

As borrowers continue to feel the squeeze caused by inflation and high interest rates, lenders in the European mid-market have seen a marked increase in covenant relief, waiver and amend and extend requests from borrowers on existing private credit loans. To bring lenders to the table to consider these requests, sponsors may offer up (or perhaps lenders may even request) some kind of equity support for the business in the form of a “sponsor guarantee” or “equity commitment.” Daniel Hendon and Andrew Montagu Surgey from Proskauer’s Private Credit Group in London discuss key considerations for lenders in these negotiations. https://bit.ly/3QEAEaX #Proskauer #privatecredit #EU #privateequity

Here's the second in the new deep dives series that we have put together on current hot topics in the private credit space.

Accelerating Balance Sheet Cleanup in Spain BBVA is making headlines with its latest move to sell a portfolio of non-performing loans (NPLs) valued at approximately €600 million as part of its ongoing balance sheet clean-up. Known as the Sayara project, this portfolio includes unsecured debts and follows a similar transaction earlier this year, highlighting a proactive approach in managing risk and improving capital ratios 🌍 Connecting to Broader Trends These developments are part of a larger trend across Europe as banks respond to regulatory initiatives aimed at reducing NPL ratios and improving financial stability. The increasing activity in Spain and Portugal signals a shift towards more aggressive NPL management, aligning with the EU's goal of fostering a healthier banking environment. https://lnkd.in/dFsmdPn5 #NPL #nonperformingloans #ABS #assetbackedsecurities #riskmanagement #NPLsecuritization #significantrisktransfer #SRT #loanportfoliosales #creditriskmitigation #ARCRatings

Scope Ratings has assigned public ratings to the tranches and credit-linked notes of Colossus 2024-1 and Colossus 2024-2, two of Santander UK’s synthetic Significant Risk Transfer (SRT) transactions, created under Synthetic Securitisation Credit Linked Note Issuance Programme. The transactions are securitisations of static portfolios composed of corporate loans granted to small and medium-size enterprises (SMEs) and commercial real estate (CRE) loans originated in the United Kingdom and British Crown Dependencies. Both transactions feature multiple synthetic senior tranches which amortise pro-rata until the occurrence of a subordination event and a synthetic junior tranche which amortises sequentially after the senior tranches. Upon the occurrence of a subordination event, all synthetic tranches will amortise sequentially. Full details on the issuer can be found here for Colossus 2024-1: https://lnkd.in/e4KP7Vnx Colossus 2024-2: https://lnkd.in/e3MSa-Bd #ratings #SRT #structuredfinance #creditratings #structuredfinance #synthetic #clo #sme #finance #cre #bank Miraç Can Uğur Benoit Vasseur, CFA David Bergman Florent Albert Keith Gilmour Mike Mackenzie

The Italy government sold 12.5% of bailout & the world’s oldest bank Banca Monte dei Paschi di Siena for $704 million (EUR 650 million) as part of divestment plan.  After the sale, Italy government holds 26.7% remaining shares in Banca Monte dei Paschi di Siena. Read - https://lnkd.in/g8PQ5wvS follow Caproasia | Driving the future of Asia The Italy government has sold 12.5% of bailout & the world’s oldest bank Banca Monte dei Paschi di Siena for $704 million (EUR 650 million) as part of divestment plan.  After the sale, Italy government holds 26.7% remaining shares in Banca Monte dei Paschi di Siena.  In 2017, the Italy government injected EUR 5.4 billion ($6.1 billion) in the bailout of Italy’s 4th-largest lender.