Montepio has sold off €580.6 million of bad loans in a move to accept reality and clean up its finances.
The transaction was the first bundling up and selling of dud loans in Portugal to carries an ‘investment’ rating.
The ‘credit securitisation’ operation was even given a name, Évora Finance, as it was carried out through Caixa Montepio’s branch in Évora with the help of JP Morgan.
"Through the transaction Évora Finance NPL, 20,169 contracts were sold with an average value per contract of €28,786," and was completed on November 3rd,” said the bank today.
Moody's and DBRS rating agencies assigned an investment level category to the operation, which was the first time in Portugal that a portfolio of non-performing loans had anything other than a ‘risk’ rating. The agencies assigned Baa3 and BBB, respectively.
According to JP Morgan, securitization, which is part of Montepio’s non-strategic asset reduction process as laid out in its Strategic Plan 2016-18, shows that “Portuguese banks are ready to clean assets.”
