1. Facts and investor expectations of the CEE NPL market

2. Deloitte estimates a 15% to 25% IRR for NPL transactions in CEE Region
Facts
Global investors raised EUR 40bn to invest in distressed assets across Europe
Volksbank Romania’s EUR 495m NPL portfolio purchased in July 2014 by Deutsche Bank, AnaCap, HIG and APS Holding put CEE on the map
EUR 3bn face value of landmark NPL transactions in the CEE Region , according to Deloitte
Deloitte estimates a 15% to 25% IRR for NPL transactions in CEE Region

3. Facts/2
Last Vienna Initiative’s deleveraging and credit monitor reported Q315’s external position (lenders’ external claims) of CESEE countries declined by 0.36% of GDP, 8.5% of GDP decline since 2008
domestic credit in CESEE rose by 2.8% yoy in November 15
BUT
mainly concentrated in Czech Republic, Slovakia and Poland
“Since January 2015 credit had been contracting or remained anemic in Hungary, Slovenia, Bulgaria and Croatia”

4. Sentiment of the sellers is improving

5. Facts/3 – some correlations

6. Investor cahiers de doleances
CEE is not Spain
– big tickets bias “less than EUR 100m is not worth it”
– lack of local servicers holding international standards
Legacy of ineffective insolvency legal frameworks
Small and fragmented SMEs
Too complex transactions as Project Neptune’s EUR 3.6bn NPL portfolio
Banking license required to operate in some countries

7. Investor expectations
Romania – EUR 12bn pipeline, effects of new VAT, dividends and insolvency law package
Serbia – deleveraging of SMEs <EUR 20m turnover NPLs
Hungary – State backed bad bank to sell EUR 6bn CRE assets
Slovenia – State to exit/Apollo’s NKBM deal, build a track record after BofA and York Capital transactions
Bulgaria – retail NPLs to pick up

8. Debtwire is the leading provider of real-time intelligence, analysis and data on distressed debt, leveraged finance and asset-backed markets.
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@antoniovanuzzo