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European NPL Investors Heading South for Summer

NPL investors continue to head south. Deals keep coming out of Spain and new markets, such as Portugal, Greece and Cyprus, are slowly emerging. But the real action has been in Italy, which finally has started to address its EUR 200bn bad debt mountain.

At Debtwire’s Italian Restructuring Forum in May, speakers discussed the moves made to speed up the market. They include the creation and use of the Atlante fund and the government’s securitisation plan, GACS. In the first half of this year, the Italian NPL market has seen Unicredit’s EUR 17.7bn Project FINO, the first sales of large secured portfolios and the approval of the restructuring of Italy’s oldest bank, Banco Monte dei Paschi, which sits on EUR 30bn NPLs.

Many investors still struggle with the Italian market and its complexities, especially in the area of foreclosing. Things should be clearer at Debtwire Week in October as more lenders will have used the GACS system and banks will know their destiny.

Italian elections, expected between the autumn and the first half of 2018 still add uncertainty but hopefully this will be a bit clearer by then too.

Compared with Italy, the Spanish NPL market is at more mature stage and portfolios now mainly consist of loans backed by residential development. Investors have become developers to take advantage of the recovering market. Lone Star Funds has been the most prominent fund to invest in developing in Spain, with Neinor Homes, which now owns one of the largest portfolios of fully-permitted land in Spain, comprising 161 developments and 9,086 equivalent residential units.

In order for the NPL market to function properly, you need good servicers. In Italy and Spain, there have been mergers and acquisitions. Some servicers are still looking to open an office in Italy. For new markets such as Greece, 2017 is a key year, with a dozen of license requests filed with the Bank of Greece.

Greek banks are expected to start selling portfolios of NPLs in the second half. There have been a few deals in Cyprus and Portugal. Whether these markets are worth their while will be a matter for debate at Debtwire Week.

Alessia Pirolo Senior Reporter Debtwire

Alessia Pirolo is a senior reporter at Debtwire ABS covering Southern European commercial real estate with a special focus on non-performing loans. Before joining Debtwire, she covered U.S. and European commercial real estate for The Wall Street Journal, and the Commercial Observer. She holds a master’s degree from the Columbia University Graduate School of Journalism.


Alessia Pirolo Senior Reporter Debtwire

Alessia Pirolo is a senior reporter at Debtwire ABS covering Southern European commercial real estate with a special focus on non-performing loans. Before joining Debtwire, she covered U.S. and European commercial real estate for The Wall Street Journal, and the Commercial Observer. She holds a master’s degree from the Columbia University Graduate School of Journalism.


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