The share of securitized is estimated at 30%-35% red loans which will be refurbished in the coming years and will again be resold either in banks or new investment funds. Secondary market trading, as the process of reselling loans once sold by banks is called, is expected to accelerate in 2023 as efforts are made to achieve operational targets undertaken for Securitized loans “Hercules”.

Of the total €86bn committed to funds, it is estimated that 30-35% of the loans to be greened will either be resold to banks and funds or re-securitized, expanding investment opportunities even for the banks themselves, which will transform from sellers to investors of bonds issued under the new securitization. The big gamble remains the return of portfolios to banks, a process that requires the consolidation of these loans and compliance with the agreed arrangements by their debtors for two years in a row. This is provided for by the rules of the European Banking Authority, so that these loans are reclassified as informed and that they can be sold again not to the bank that transferred them, but to another bank. The beneficiary in this process will be both the funds, which will increase the recovery on securitized loans, and the bank that will buy them, thereby strengthening its informed portfolio, as well as allowing these debtors to return “clean” to the banking system. Already a few days ago, Cepal completed a €30 million business loan deal with buyer Optima, with more similar deals expected throughout 2023 at a much higher value.

Portfolio sales between the funds will also dominate efforts to achieve Hercules’ goals, and in this context, doValue is launching two new sales (named Heliopolis and Suez) with a book value of €400 and €200 million and a total demand of €800. and 300 million euros respectively. The Heliopolis portfolio includes mortgage and small business loan debt from 7,000 borrowers, while Suez’s portfolio includes debt from 2,000 borrowers who joined the Katzeli Act and are serving a settlement they won in court. Both portfolios come from securitizations of Cairo I and II, with mandatory offerings expected by the end of the first quarter. Such transactions have already preceded, for example, the Tethys portfolio with hotel loans totaling €254 million transferred to Intrum, the Souk portfolio (valued at €2.6 billion) and the Virgo portfolio (valued at €900 million) transferred to doValue et al.

The re-securitization of already securitized portfolios has not “appeared” in the Greek market yet, but large funds that have invested in the red credit market are reported to be planning the first such transactions before the end of 2023. loans that have not yet completed two years of normal repayment will also be reported so that they return to the banks healthy. These are loans that are regulated and thus can be securitized by issuing a senior bond in which, for example, banks or other funds can invest.