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Hellenic Bank: Completion of Starlight Project

31/03/2023 11:24

Hellenic Bank announced the completion of Starlight Project, which concerns the sale of a non-performing loan (NPL) portfolio and the sale of APS Debt Servicing Cyprus Ltd, pointing out that the transaction has significantly reduced the risk on its balance sheet.

In a press release, Hellenic Bank says that the project was a transaction package that included the securitization of NPLs amounting to approximately €1.4 billion (Starlight Portfolio) on December 31, 2022 and the sale of the Bank's platform, APS Debt Servicer. APS was sold to Themis Portfolio Management Ltd, an indirect subsidiary of Oxalis Holding S.A.R.L., which is managed and advised by Pacific Investment Management Company LLC (PIMCO).

Hellenic Bank  transferred  the Starlight Portfolio to Themis Portfolio (S1) Management Holdings Ltd ("Themis S1"), a Cypriot Credit Acquisition Company, followed by the sale of Themis S1 to Oxalis.

The bank also sold 100% of the shares of APS Debt Servicer to Themis Portfolio Management Ltd ("Themis"), a Cypriot debt recovery and property management company owned by funds managed by PIMCO, for €37 million.

Hellenic Bank also announced the signing of a long-term exclusive agreement for the management of the remaining NPL portfolio of the Bank, as well as future bad loans that may arise.

According to the Bank, the transaction has significantly de-risked its balance sheet, reducing its adjusted NPL ratio, excluding NPLs covered by the Asset Protection Program (APP), to approximately 3.6% from 13.5% on December 31, 2022.  Including NPLs covered by APP, the adjusted NPL ratio fell to around 9.8% from 19.2% on 31 December 2022.

According to the Bank, the transaction has a "positive capital impact", of approximately 0.8%, with the adjusted Common Equity Tier 1 capital ratio increasing to 19.1% from 18.3% at December 31, 2022.

In a written statement the Bank's Chief Executive Officer Oliver Gatzke says that "the completion of the Starlight Project marks a new era for the Bank" and adds that the bank has managed to "significantly reduce the risk on its balance sheet from the NPLs".

He further notes that through the sale of APS Debt Servicer to Themis, the Banks looks forward to working with PIMCO to further deleverage the Bank's NPLs, benefiting from PIMCO's experience.