Greek shipping lender Piraeus Bank has finalised a major sale of corporate non-performing loan exposure to a US fund.
The portfolio being sold to Davidson Kempner Capital Management had a gross book value of €507m ($565m), or €535m as a total legal claim, as of 31 October last year.
But Davidson Kempner is paying €240m.
The transaction is subject to "ordinary terms and approvals by the competent Greek authorities, including the consent of the Hellenic Financial Stability Fund", Piraeus Bank said.
The deal will reduce the bank’s non-performing exposure ratio by about 50 basis points (bps), it added.
The bank had been linked for some time to a disposal of its so-called Nemo book of shipping loans.
The package was said to be worth between €500m and €600m.
Hedge funds had been expected to move for the portfolio.
The bank had said last week the non-performing loan portfolio was cut by €500m in the first quarter to €26.9bn, "on the back of organic initiatives," it said.
It added that two books worth €1.8bn were sold in the fourth quarter.
And it had said two more portfolio sales were in the pipeline: secured shipping loans worth €500m and unsecured consumer loans worth €700m.
Bad bank going
Piraeus Bank is also hiving off its non-performing assets in a deal with Swedish credit manager Intrum.
The bank's internal recovery banking unit platform will be transferred to a new entity 80% owned by Intrum and 20% by the bank.
The new operation will enter into a contract to service the lender's existing €27bn ($30.5bn) non-performing exposure (NPE) portfolio, together with any new inflows, on an exclusive basis.
The new platform, valued at €410m, will also manage third-party NPE.
The initial deal will last for about 10 years.
US-based Davidson Kempner has more than $30bn in assets under management.
It was founded in May 1983 by Marvin Davidson and is led by Thomas Kempner Jr and Anthony Yoseloff.