National Bank – Completes “Frontier” landmark transaction

National Bank has made known the completion of the “Frontier” transaction, after obtaining all the necessary approvals, including the provision of a guarantee by the Greek State on the bonds of high repayment priority in application of the provisions of Law 4649/2019 on the “Iraklis”  Guarantee Program for securitization of credit institutions.

The transaction concerns the securitization of a portfolio of non-performing exposures with a total book value of 6 billion euros

The “Frontier” transaction is a milestone and contributes significantly to the consolidation of the National Bank balance sheet in view of achieving a single-digit index of non-performing exposures immediately. Specifically, the transaction (a) received two credit ratings, (b) did not require a spin-off of the National Bank banking sector by setting up a new company (hive down) and (c) will be serviced by a management company that is not a spin-off product of the NBG. In terms of capital support, the transaction is unique in the domestic market, enhancing the EIB’s capital adequacy by 1.5 percentage points.

The EIB holds 100% of the Senior High Priority Bonds, as well as 5% of the Mezzanine and Junior Priority Bonds, while 95% of the Medium (Mezzanine) and Low (Junior) Bonds. is available to the consortium consisting of subsidiaries of the investment companies Bain Capital Credit and Fortress Investment Group as well as doValue Greece.

On behalf of the NBG, Morgan Stanley & Co. International plc acted as financial advisor and organizer of the transaction, the law firms Clifford Chance LLP and Karatzas & Associates as assistant legal advisers in English and Greek law respectively, Oliver Wyman as financial and technical advisor while Cerve supported the Bank portfolio.