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Hellenic's Starlight with Pimco was completed

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The Transaction has a positive capital impact of approximately 0.8% with the adjusted Common Equity 1 ratio increasing to 19.1%

Ολοκληρoθηκε το Starlight της Ελληνικorς με την Pimco

Hellenic Bank announced the completion of the Starlight Project, i.e. the sale of non-performing loans to Pimco.

The Starlight Project 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 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 High, Medium and Low Senior Notes,

• The acquisition by Oxalis of 95% of the Mezzanine and Junior Bonds of the Securitization and 33.3% of the Senior Bonds, with the Bank holding 66.7% of Senior Bonds (approximately €113 million) and 5% of Mezzanine Bonds (approximately €4.5 million) and 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 Notes.

Positive capital impact 0.8%< /strong>

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 31 December 2022, reflecting the deconsolidation of the portfolio, the Bank's investments in High, and Medium senior bonds as well as the profit from the sale of APS Debt Servicer.

Through the agreement to manage 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-term experience and track record in managing MEX in Europe.

The Transaction was made based on 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 by Oliver Gatzke, Chief Executive Officer 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 enhances the Bank's profitability.

Barclays Bank Ireland PLC acting through of their Investment Bank (“Barclays”) acted as the Bank's Lead Financial Advisors 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.

Source: www.kathimerini.com.cy

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