Global Debt Sales survey 2012 - Vastgoedjournaal

MARKET OVERVIEWAre LTROs a brake on sales?This is due in part to the EUR1 trillion of long-term refinancingoperations (LTROs) the European Central Bank (ECB) has pumpedinto the banking system. In a move of unprecedented scale, theECB injected EUR489 billion of cheap money on 21 December2011 and a further EUR530 billion on 29 February 2012. Thislong-term refinancing of banks had an exceptionally longmaturity of three years (prior issues were matured within 18months), with an option of early repayment after one year asa fixed-rate tender at full allotment (see graphs, page 10).Europe’s banks gratefully accepted the cheap money –priced at 50 basis points for three years – and initiallydeposited the funds with the ECB. Some banks havealso used parts of the LTRO allocation to acquiresovereign debt, having the duel effect of pushingdown sovereign debt yields and boosting bank profitsthrough the spread created on the carry trade.“There is a general view that LTROs have reducedthe urgency of asset sales in the short term,”says Nick Colman, Director in the PortfolioSolutions Group at KPMG in Germany. “Thismay be the case for the very large portfolios oflong dated residential mortgages and projectfinance loans that they have sitting on theirbalance sheets, but we see a lot of saleactivity for stressed and NPL portfolioswhich are expensive from a capitalperspective and where value leakage forthe bank is a key concern.”LTROs were designed to stimulatebank lending to corporations and8 GLOBAL DEBT SALES SURVEY © 2012 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity.