By Leonidas Stergiou
After a series of presentations abroad by officials of the Special Secretariat of Private Debt that had started before Easter, six major investment schemes expressed interest in the international competition for the Agency for the Acquisition and Re-leasing of Real Estate of Vulnerable Households of the Bankruptcy Law.
These are the funds Bain, Bayview, Bracebridge Capital, CRC, Davidson Kempner and Fortress, of which they are already active in the Greek market of red loans and real estate. For example, the new Cepal is a joint venture between Alpha Bank and Davidson Kempner. Bain and Fortress funds, together with doValue, participate in a joint scheme for the €1 billion “Frontier 2” securitization of National Bank. doValue works closely with Eurobank’s securitizations, such as Intrum with Piraeus Bank.
The American capital Bracebridge has also developed activities in the real estate market internationally, while it became perhaps best known for its participation in the restructuring of Argentina’s debt. The also American Bayview Capital focuses mainly on asset management and holdings in small and medium-sized companies. The Chinese CRC Capital operates more as a “boutique” investment bank and venture capital focusing on innovative companies and projects in the financial industry and digital currencies. All six, either directly or indirectly, also have great experience and presence in real estate management.
The tender process was started in June by the Ministry of Finance, with a deadline of the end of July for expression of interest files to be submitted. The deadline was slightly extended until early September in order for the funds concerned to submit more detailed information. The expression of interest entitles only these investment funds to proceed to the next phase of the international competition which includes consultation and goes all the way to the submission of bids. The competition is run by the Special Secretariat of Private Debt.
In particular, according to the tender announcement, the process will be conducted in two phases: the pre-selection phase (A ́ Phase) and the dialogue phase and submission of binding offers (B ́ Phase). Details can be found on the e-Procurement Portal. Also published in the Official Journal of the EU is the announcement for the conduct of a public international electronic tender with the process of competitive dialogue for the awarding of a concession contract for the duties and responsibilities of the Real Estate Acquisition and Leasing Agency (Article 218 of Law 4738/2020).
Intermediate protection program
The Agency is also a “tail” of the obligations from the enhanced supervision. Among the obligations is the start of consultation with investors by the end of September at the latest. According to the tender process, its operation is expected in at least one year. In the meantime, it has launch the so-called intermediate program, which provides a government subsidy for the installment of the housing loan of vulnerable debtors in the amount of 70 to 210 euros per month, depending on the composition of the household, for a period of up to 15 months through OPECA. vulnerable debtors is the avoidance of creditor measures (eg foreclosures, auctions and evictions).
When the Agency is operational, it will be obliged to buy the first residence of vulnerable households that have failed to settle their debts in the out-of-court mechanism. Also, the Agency is also concerned with the cases of first residence whose forced execution is expedited. In order to be considered vulnerable, someone must meet specific criteria and have submitted an application and received a relevant certificate from the electronic platform of the Special Secretariat.
Eligible borrowers for the interim first home protection program are those who meet the following income and property and other criteria:
a) The total income must not exceed 7,000 euros for a one-person household, increased by 3,500 euros for each member of the household and up to the amount of 21,000 euros per year, regardless of the composition of the household.
b) The total taxable value of the real estate must not exceed the amount of 120,000 for a one-person household, increased by 15,000 euros for each additional member and up to the amount of 180,000 euros.
In addition, the asset limit applies regarding deposits, bonds, shares, etc. which applies to “Housing Allowance”.
The criteria are checked and cross-checked when issuing a certificate of vulnerability, which is necessary for participation in the program and is issued by a special electronic platform of the Special Secretariat for Private Debt Management. The online platform has been designed so that there is no need to manually gather supporting documents when submitting the application, significantly reducing paperwork. In addition, through the electronic platform, automated checks and cross-checks will be carried out, with the aim of preventing and excluding strategic non-payers.
After 15 months and with the Agency’s operation
With the end of this program, after 15 months, vulnerable debtors who will be unable to service a long-term and sustainable arrangement, should turn to the special Real Estate Acquisition and Leasing Agency for debt settlement and the provision of a 2nd chance. The Agency in question will acquire the first residence of the specific vulnerable debtors and subsequently re-lease it to them for 12 years. The State will provide a monthly housing allowance, in order to support them in their obligation to pay rent. At the end of the 12-year period, borrowers will have exclusive first priority to repurchase the home once they have recovered financially.