Alpha bank executes capital relief trade

Alpha Bank has executed a synthetic securitisation that references a €650m portfolio of Greek corporate and SME loans. Dubbed project Tokyo, the first loss financial guarantee was executed with the European Investment Bank group and it’s one of the last ones under the European guarantee fund (SCI 11 February).

The transaction forms part of the lender’s strategic plan called “Project Tomorrow” and is expected to contribute around 13bp to its total capital ratio on a consolidated basis. The deal features a 3.5-year portfolio weighted average life and a time call that is in line with the WAL as well as a pro-rata amortization structure with triggers to sequential amortization.

According to sources close to the transaction, ‘’the main motivation behind the transaction is capital relief following the new strategic plan and a capital raise from last year, as opposed to just generating capital to offload NPL portfolios. Among last year’s capital generating actions included the sale of our Merchant acquiring business unit. Overall, we are just using synthetics for loan growth and balance sheet optimization.’’

Indeed, Piraeus bank confirmed the same past and future motivations following their latest synthetic securitisations (SCI 7 July).  

Looking forward, the same source states, ‘’we will be tapping the market but market sentiment must be conducive enough so the transaction can work from our perspective. Still, we would be aiming for one to two deals per year and target returns on capital for our corporate, SME and retail portfolios.’’

Stelios Papadopoulos