Moody’s thumbs up to Bank of Cyprus bad loans sale
The recent sale of non-performing loans by the Bank of Cyprus worth 2.8 billion euros is a positive step, according to Moody’s credit rating agency.
Moody’s Investors Service pointed out in a September 3 report that the sale would reduce significantly the overall NPL burden of the Bank while also increasing its capital reserves.
The report says the sale of 2.7 billion euro-worth of bad loans had real estate as collateral involving loans that had gone in the red, both corporate as well as small and medium size businesses.
The deal means that the largest lending institution in Cyprus would receive 1.4 billion euros out of the transaction.
Moody’s says the completion of this transaction would mark a credit positive development, with the bank’s NPE/gross loan ratio forming at 38 percent.
The buyer of the 2.8 billion euro debt is Apollo Global Management, buying off a mixed portfolio comprising 14,024 loans to corporate borrowers as well as small and medium enterprises (SME), secured over 9,065 properties according to BoC. [Kathimerini Cyprus]
