US fund PIMCO has been revealed as the buyer of parts of Greek shipping lender Eurobank's €9.4bn ($10.7bn) non-performing loan book.
The bank said it is entering into exclusive negotiations for the sale of 20% of the mezzanine and junior notes of its mixed €7.4bn non-performing exposure (NPE) Project Cairo portfolio, as well as a majority stake in Financial Planning Services (FPS), a licensed NPL service company currently 100% owned by Eurobank.
The period for talks ends on 30 September.
PIMCO has also agreed to acquire 95% of the junior and mezzanine notes of a EUR 2bn non-performing mortgage loan book called Project Pillar.
The implied valuation is 58%. Eurobank will retain 100% of the senior notes.
"This transaction is...a milestone for the Greek market, opening a new chapter in the active management of Greek NPEs," said Fokion Karavias, CEO of Eurobank.
"Both agreements send a clear signal of renewed market trust to the prospects of Eurobank and the Greek economy.”
The bank's loan provisions were cut to €165m in the first quarter, down from €167m in the same period of 2018.
Its NPE stock was cut by €150m year-on-year, bringing the NPE ratio lower to 36.7%, the smallest figure among local peers.
