Frontex - Debt 2

Country:

Bulgaria

Project number:

48960

Business sector:

Insurance, Pension, Mutual Funds

Notice type:

Private

Target board date:

05 Jul 2017

Status:

Passed Final Review, Pending Board Approval

PSD disclosed:

02 Jun 2017

Project Description

EUR 6 million syndicated secured long-term loan to Frontex International, the third largest nonperforming loan (NPL) asset manager in Bulgaria.

Project Objectives

The project provides finance to Frontex International in support of their expansion of NPL purchases from financial institutions, telecoms, other utility companies and other Bulgarian originators. It will allow the company to extend the maturity of and diversify the sources of its funding base.

Transition Impact

The transaction is the first syndication to an independent NPL asset management company in Bulgaria and will (i) support Frontex in further expanding its NPL purchases from financial institutions in Bulgaria, thereby contributing to the development of a strong and efficient NPL market, facilitating new lending to the real economy by the selling FIs and allowing both corporate/SME and retail debtors to become economically active again and (ii) introduce a new borrower asset class to international investors.

Client Information

FRONTEX INTERNATIONAL EAD

Frontex is a Bulgarian debt servicing company, focused on the purchase of overdue receivables (SME and retail loans, telecom and utility bills), i.e. NPLs, from Bulgarian originators as well as collection of NPLs on behalf of Bulgarian originators for a fee. The company was established in 2009 by AG Capital, the largest group offering real estate related services in Bulgaria in order to provide solid financial backing for sustainable development in the acquisition of portfolios, as well as offering flexible debt collection solutions. In 2013, Emerging Europe Accession Fund (EEAF) managed by Axxess Capital acquired a majority stake in the company. EEAF's major investors are EBRD, EIF, DEG, BSTDB.

EBRD Finance Summary

EUR 3,000,000.00

EUR 6 million long term secured loan to be syndicated to co-lenders out of which the EBRD will be providing up to EUR 3 million.

Total Project Cost

EUR 6,000,000.00

Environmental and Social Summary

Categorised FI. Frontex's collection practices are in compliance with European standards for collection practices and data protection. Frontex is a member of the Association of Collection Agencies in Bulgaria (ACAB) although Frontex's code of conduct goes beyond that required by ACAB. Frontex are compliant with the Bank's Performance Requirements (PR) 2 and 4. SME NPLs will be included in this new transaction and Frontex will need to develop necessary environmental and social risk management, in line with PR 9. Frontex will need to continue to report annually on their compliance with the EBRD's PRs 2, 4 and 9 and to confirm their continuing compliance with EU standards and Bulgarian ACAB requirements for their debt collection and data protection.

Technical Cooperation

None.

Company Contact Information

Gabriela Dimitrova
office@frontex.bg
+359 2 439 04 63
http://frontex.bg/en/business-partners/about-the-company

Business opportunities

For business opportunities or procurement, contact the client company.

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Text of the PIP

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Project Complaint Mechanism

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