Non-performing loans: German NPL sale is blueprint for asset disposals

In early August a syndicate of four German banks – Eurohypo, Landesbank Hessen-Thüringen (Helaba), Berlin Hyp and Goldman Sachs-owned Archon Capital Bank – completed the sale of a real estate whole-loan portfolio with a face value of €370 million to private equity buyer Colony Capital. This is the firm’s fourth NPL portfolio transaction in Germany since 2009 but is unusual in that the loans were all sold together as a package. The buyer was initially approached by one of the banks but was reluctant to consider a partial purchase. This bank subsequently negotiated with the others to sell the entire portfolio in one transaction. "It is rare to find a transaction like this one as usually one or two members of a syndicate are reluctant to sell," Dilip Awtani, managing director and head of European debt strategies at Los Angeles-based Colony Capital, tells Euromoney. "Buying a piece of a syndication is less attractive to us as we would not have control of the investment and would end up in long debates about how to exit." Awtani reckons this is the first time such a trade has been completed in Europe.