Alpha Bank: acquisition of Cepal, non-binding bids on Galaxy by end June

 The coming days will be of crucial importance for the transformation of Alpha Bank as non-binding offers for the securitization of the Galaxy project are expected to be submitted by the end of June and the process of taking control of Cepal will commence, according to senior officials at the Greek lender.
Sources said that the management of Alpha Bank and advisers to the sale (Deutsche Bank, PwC, Alantra) have already sent a teaser to more than 10 investors, who have been invited to sign confidentiality agreements (NDAs) to start the process. Non-binding offers will be submitted by the end of June and the transaction is expected to take place before the end of the year.

In the next few days, Alpha Bank will complete the procedures to obtain full control of Cepal shares, buying 60 percent of the company controlled by Centerbridge ( the transaction has been agreed upon).

* The Galaxy portfolio consists of non-performing loans from small and medium-sized and large retailers worth 7.6 billion euros and loans to small and medium-sized enterprises and large businesses amounting to 3 billion euros, with an estimated price of just over 400 million euros. .

The securitization, which may be limited to a range of 7.5 to 10 billion euros, from the 12-billion-euro amount originally planned, remains one of the largest in Europe and is attracting strong interest from investors. It should be noted that the estimated price may be close to 500 million euros.

Alpha Bank estimates that the securitisation may result in a capital loss of about 2.5 billion euros, which is what the lender had said when it planned for the Galaxy deal to be worth 12 billion euros.
A Reuters report said yesterday that Alpha Bank was in talks with at least five funds on the Galaxy project, including Cerberus and PIMCO, while Bain Capital Credit, Apollo and Centerbridge are also considering the investment. Bank officials, however, point out that the source on the story was not fully informed.

Priorities

In introducing the plan for the Galaxy project to investors recently, Alpha Bank CEO Vasilis Psaltis set the following priorities:
A) The sale of the new Cepal to the investor (who will buy the Galaxy securitisation) after Alpha Bank acquires full share control of it, buying 60 percent of Cepal from Centerbridge.
B) Make progress on the process of selling the first two NPLs portfolios of the Galaxy title, which will be transferred to the Hercules bad loan program with two different SPVs. SPV I will include non-performing housing loans of 1.9 billion euros and SPV II will include non-performing retail loans (not only mortgages) with real estate collateral amounting to 5.7 billion euros.

C) Make progress on the rating process for the third securitization portfolio (business NPLs of 3 billion euros) as markets become steady and investment interest is strengthened.

In addition to these priorities, the bank will proceed with the individual sales of two portfolios that were originally integrated into the Galaxy securitization plan: a portfolio of leasing receivables (200-300 million euros) and a portfolio of retail loans without collateral (900 million euros), which will be sold independently, whenever there is an interested buyer (either before, during or after the Galaxy titles).

In the fourth quarter of 2020, the corporate transformation of Alpha Bank (hive-down) is expected to be completed including its conversion into a listed holding company as bank operations are spun off into a new subsidiary.

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