Non-Performing Loans

A new type of court restructuring proceeding has been introduced in Poland as part of the COVID-19 crisis legislation: simplified restructuring proceedings available until June 2021, allowing the debtor to individually initiate the proceedings, said Karol Czepukojc and Pawel Dlugoborski, two counsels co-heading Baker McKenzie’s restructuring and insolvency practice in Poland.

Governments and regulators need to be investors' “best friend” as they face a new wave of non-performing loans, said panellists involved in NPLs in Europe, China, and globally on a webinar, The New Rise of NPLs - Strategies and Investment Opportunities in the Market, aired live yesterday (14 October) during Debtwire Week.

The COVID-19 crisis has hit the European NPL market. The first three quarters of 2020 have been the least active since 2015, with only EUR 39.2bn of deals completed across Europe, according to the new Debtwire European NPLs 3Q20 report presented at Debtwire Week.

The USD 500m debt of Istanbul Deniz Otobusleri (IDO), a Turkey-based ferry company, will be divided into two as a sustainable and unsustainable loan, which will be reinstated separately on the OpCo and MidCo levels, according to two sources familiar with the situation.

Securitisations of non-performing loans using state guarantee schemes in Italy and Greece have been the main tool European banks have used to dispose of NPLs so far this year, a Debtwire anaylsis shows.

European banks have been preparing for a new wave of bad loans due the COVID-19 crisis. In the first quarter of 2020, Europe's largest banks set aside more than EUR 21.5bn of provisions to cover losses from bad loans, up 207% from EUR 7bn in the same period in 2019, as they brace for a financial fallout due to the virus.

The volume of non-performing loans of Spain’s six largest banks decreased further during  1Q20, but the banks have still set aside record levels of provisions to cover losses from an expected surge in bad loans due to the coronavirus pandemic.

The COVID-19 outbreak has effectively halted non-performing loan portfolio sales in Europe. With a total volume of loan sales of EUR 3.8bn, according to the new Debtwire European NPLs – 1Q20 report.

NPL Chart of the Week: 21 January 2020

NPL Chart of the Week: 07 January 2020

NPL Chart of the Week: 09 December 2019

NPL Chart of the Week: 03 December 2019