CMS Budapest has advised Balbec Capital LP and APS Holding on the financing and acquisition of a non-performing loan portfolio of residential mortgages from UniCredit. The total claim value of the portfolio is HUF 42.7 billion, or approximately EUR 139 million. Reti, Antall & Partners — the law firm associated with PWC in Hungary — advised UniCredit on the deal, which is one of the first residential mortgage portfolio sale and purchase transactions on the Hungarian market.
The portfolio will be serviced by APS Hungary Kft.
Investors for the transaction are an investment fund managed by Balbec Capital LP and APS-advised Loan Management Investicni Fond a.s. It is the first acquisition by APS on the Hungarian market, and adds to the company's existing advised credit funds containing the 76 portfolios worth EUR 4.9 billion, and, according to Dora Horvath of Reti, Antall & Partners, "in Hungary, this is the second occasion when a commercial bank sells its entire consumer NPL portfolio."
Martin Machon, CEO of APS, commented that: “We are pleased to have completed our first Hungarian acquisition. Our target is long term collaboration with debtors. We are dedicated to find mutually beneficial solution in each and every single case. We are going to bring our best professional practice based on more than 500,000 debt recovery cases and 13 years of history on the EU market. “
Viktor Levkanic, Investment Director of APS, added: “We have been actively participating in the NPL transactions in Hungary for last several years, primarily at corporate secured and residential NPLs. During this time, we have built up our local market understanding and relationships. We believe in the market, see a strong potential for further investment opportunities and also trust the long-term performance of the economy.”
And Victor Angelescu, CEE Regional Director of APS, said: “We expect to employ debt collection professionals, analysts and other highly qualified personnel during the first half of 2017. The first employees are already on board, we are still searching on the market for ambitious and talented people.”
The CMS team was led by Senior Counsel Eszter Torok and included Associate Szabina Soptei and lawyer Zsolt Beregi.
The Reti, Antall & Partners team consisted of Dora Horvath and Janos Farago. According to Horvath, "we provided legal advice to the client during both the tender process and the transaction. During the tender process, we negotiated confidentiality agreements with eleven potential bidders and prepared the first draft of the portfolio transfer agreement. Furthermore, we provided legal advice to the client regarding the content of the virtual data room and during the evaluation of the bids. In the transaction phase, we represented and provided legal advice to the client during the negotiations with the winning bidder regarding the content of the portfolio transfer agreement and its annexes. We provided legal assistance also during signing and closing and in relation to certain post-closing activities."
PWC (in the persons of Balazs Szecski, Csaba Polacsek, and Bogdan Petre) served as financial advisor on the deal.