EFG Eurobank Ergasias closed its 3.3 billion ($4.2 billion) Greek securitization of receivables. The transaction was arranged by Citigroup and Deutsche Bank.
The deal, Anaptyxi SME II 2009-1,is the first Greek securitization of receivables arising from a portfolio comprising 100% Allilohreos loans. These are a type of Greek revolving loans to small and medium businesses and large corporates. Its the second deal from Eurobank EFG containing such assets. The class A Notes were rated 'A1' by Moody's Investors Service.
The transaction is structured to emulate the cashflow arrangements of master trust structures utilized in credit card securitization transactions in the U.K.
Eurobank EFG will retain a significant interest in the portfolio in the form of a "seller's piece" (minimum level set at 7.0%) structured by way of a Deferred Purchase Price mechanism.
Upon occurrence of an early amortization event, the scheduled five-year revolving period will end and the transaction will enter into an amortization period whereby principal will be repaid on the 2009-1 loan notes using a fixed investor percentage set at the start of the early amortization period.
The Allilohreos loan agreement has no prescribed maturity and may be subject to termination unilaterally (either in whole or in part) by either party at any time. Obligors can drawdown on a set credit limit in three ways via an overdraft utilization, term deal utilization and term loan utilization.
The repayment maturity will depend on the type of usage by the obligor, with overdrafts having no prescribed maturity, term deals having maturities of up to twelve months and term loans having maturities of up to twelve years.
According to Moody's, the complete flexibility for accountholders to utilize all or part of their credit limit in any combination of the three types of usage provides little visibility as to the repayment profile on the assets during the life of the transaction.
In addition, given that the Allilohreos loans are designed to mostly cover the working capital of the SME borrower,
Moody's believes that the borrowers may face difficulties in refinancing should termination of the Allilohreos loans were to occur suddenly.
This risk could be particularly significant if, at the time of termination, Eurobank EFG's credit strength and its ability to offer refinancing to the borrowers were to significantly weaken or if Eurobank EFG were to become insolvent.