Alpha Bank in talks with Cerberus, Pimco to sell Us$11bil of bad loans

LONDON: Greece’s Alpha Bank is in talks with at least five US investment firms including Cerberus and Pimco in a fresh attempt to offload a portfolio of bad debt worth more

€10bil than (Us$11.3bil), two sources told Reuters.

The portfolio, known as Galaxy, consists of

€7.6bil retail loans worth plus loans to medium-sized and large corporate clients worth €3bil,

the first source said.

Alpha, the fourth largest bank in Greece,

€400mil €500mil could earn to from the sale, the second source said.

Alpha launched the process, which includes the sale of loan servicing platform Cepal, early this year but halted negotiations as the coronavirus crisis struck.

It has asked bidders to submit tentative offers by June 29, the second source said.

Bain Capital Credit and Apollo are looking to join the race, alongside US investment firm Centerbridge, which recently agreed to sell its 60% stake in Cepal to Alpha, the sources said.

Cerberus and Bain declined to comment. Alpha Bank, Pimco, Centerbridge and Apollo were not immediately available for comment.

The sale is the most significant attempt by a Greek bank to clean up its balance sheet since the coronavirus crisis forced lenders to put transaction plans on hold.

If successful, the deal could revive disposals of non-performing loans (NPLS) across Southern Europe where Greek and Italian lenders have sought bidders for billions of euros of bad debts.

Alpha aims to sign a deal by the end of the year, the first source said. The process is expected to gain momentum after the summer and close in the fourth quarter.

National Bank of Greece is likely to follow suit with the sale of its Frontier portfolio while Piraeus Bank is preparing two NPL

€7bil, securitisations totalling the sources said.

A source close to Piraeus said the bank planned to take advantage of the government’s Hercules bad debt reduction scheme to smooth the sale of two portfolios, known as project Vega and project Phoenix, with loans

€5bil €2bil worth and respectively.