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Completion of Project Starlight

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Ολοκλorρωση τ&omicron ;υ Eργου Starlight

Hellenic Bank Public Company Limited (the “Bank”) is pleased to announce the completion of the Starlight Project.

Project Starlight refers to the sale of a portfolio of non-performing loans (“NPL”) and the sale of APS Debt Servicing Cyprus Ltd (“APS Debt Servicer”). The Project was a package transaction that included (a) the MEX securitization of approximately €1.4 billion (the “Starlight Portfolio”) on December 31, 2022 and (b) the sale of the Bank's platform, APS Debt Servicer, to Themis Portfolio Management Ltd (an indirect subsidiary of Oxalis Holding S.A.R.L. (“Oxalis”), an entity managed and advised by Pacific Investment Management Company LLC (“PIMCO”)) (the “Transaction”).

The Transaction consisted of:
• The transfer of the Starlight Portfolio to Themis Portfolio (S1) Management Holdings Ltd (“Themis S1”), a Cypriot Credit Acquisition Company and the subsequent sale of Themis S1 to Oxalis,
• The securitization of the Starlight Portfolio (the “Securitization”) and the issuance of Senior, Medium and Junior Notes,
• The acquisition by Oxalis of 95% of the Mezzanine and Junior Notes of the Securitization and 33.3% of the Senior Notes, with the Bank holding 66.7% of the Senior Notes (approximately €113 million) and 5% of the Intermediate Notes ( Mezzanine) (approx. €4.5 million) and the Junior Bonds,
• The sale of 100% of the shares of APS Debt Servicer to Themis Portfolio Management Ltd (“Themis”), a Cypriot debt management and recovery and property management company, owned by funds managed by PIMCO, for a total consideration of €37 million .and
• The signing of a long-term exclusive agreement for the management of the remaining MEX portfolio of the Bank as well as the future problem loans that may arise.

The Transaction has significantly de-risked the Bank's balance sheet, reducing its adjusted NPL ratio excluding NPLs covered by the Asset Protection program (“PPS”) to approximately 3.6% from 13.5% at 31 December 2022. Including of NPLs covered by the PPS, the adjusted NPL ratio decreased to approximately 9.8% from 19.2% on December 31, 2022. The frontloaded de-risking on the balance sheet allows the Bank to normalize the loan impairment loss cost ratio , with the Bank benefiting from the interest income from the withholding of 66.7% of the Senior Bonds.

The Transaction has a positive capital impact of approximately 0.8%, with the adjusted Common Equity Tier 1 capital ratio increasing to 19.1%% from 18.3% at December 31, 2022, reflecting the deconsolidation of the portfolio, the Bank's investments in the Bonds of High and Medium repayment priority as well as the profit from the sale of APS Debt Servicer.

Through the agreement for the management of the remaining MEX portfolio, as well as MEX that may arise in the future, the Bank expects to benefit in relation to achieving further deleveraging from its partnership with PIMCO given its long-standing experience and track record of managing MEX in Europe.

The Transaction was made on the basis of the principle of equal distances (arm's length). It is noted that Poppy S.A.R.L., which owns 17.3% of the Bank's share capital, belongs to investment funds managed by PIMCO.

Statement Oliver Gatzke, Chief Executive Officer of Hellenic Bank:

The completion of the Starlight Project heralds a new era for the Bank. We have managed to significantly reduce the risk on the Bank's balance sheet from MEX, reducing the adjusted MEX ratio to 3.6%. The transaction was achieved with a positive effect on funds, while the Bank's participation in the financing of the Senior Notes ensures interest income for the coming years. Further, through the sale of APS Debt Servicer to Themis, we look forward to partnering with PIMCO to further deleverage the Bank's MECs with the Bank benefiting from PIMCO's experience and track record in managing MECs. We can now focus on our strategic objectives to grow and transform the Bank for the benefit of our customers, employees and shareholders. In a period of increased volatility in international markets, the Bank's fundamentals remain strong, with high levels of capital and ample liquidity, while the evolving interest rate environment increases the Bank's profitability.

Barclays Bank Ireland PLC acting through their Investment Bank (“Barclays”) acted as the Bank's Lead Financial Advisers and Exclusive Securitization Intermediaries. PricewaterhouseCoopers acted as the Technical Financial Advisers of Support. Allen & Overy LLP and Clifford Chance, S.L.P. provided advice on international legal issues and Georgiadis & Pelidis LLP regarding Cypriot legal issues. KPMG Limited provided Implementation Support Services.

For further information, please contact Investor Relations at: ir@hellenicbank.com

Source: www.kathimerini.com.cy

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