Attica Bank Strikes Deal with Davidson Kempner to Shed €3.7 Billion in Bad Loans

09:33 13/11/2024 - Πηγή: iEfimerida

Attica Bank has finalized an agreement with Davidson Kempner Capital Management to offload two significant non-performing loan (NPL) portfolios, dubbed "Domus" and "Rhodium."

The deal involves the sale of 95% of the mezzanine and junior tranches of notes from these securitizations, representing

a gross book value of approximately €3.7 billion.

Under the terms of the agreement, Attica Bank will retain full ownership of the senior tranches, which benefit from the "Hercules" asset protection scheme, and a 5% stake in the mezzanine and junior tranches. This strategic move is aimed at significantly reducing the bank's NPL ratio, with the goal of bringing it below 3% after the transaction is completed.

The sale proceeds reflect the value of the senior tranches combined with the purchase price for the lower-ranking notes.

This equates to roughly 35% of the gross book value of the Domus and Rhodium portfolios. The transaction is anticipated to close in the fourth quarter of 2024, subject to regulatory approvals.

Attica Bank received financial advice from UBS Europe SE and legal counsel from Milbank LLP and Hogan Lovells LLP internationally, and Potamitis-Vekris locally.

Davidson Kempner, a global investment management firm with $37 billion in assets under management, brings extensive experience in fundamental investment strategies. The firm operates from offices in major financial centers worldwide, including New York, London, Dublin, and Hong Kong.

This transaction marks a significant step for Attica Bank in its efforts to clean up its balance sheet and improve its financial health.

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