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Transaction Case: Portfolio of non-performing mortgages in France

In December 2019, Hoist Finance closed the acquisition of a portfolio of non-performing mortgages sold by one of the major banks in France. The portfolio has a principal balance of approximately EUR 375 million, distributed over 3,500 loans, and represents not only the largest investment ever made by Hoist Finance (in both secured and unsecured) but also the largest Residential NPL transaction of the decade in France.

The acquisition process started in July 2019 with a Non-Binding Phase, with the binding phase starting in early September. The due diligence/underwriting phase then lasted for two months and included three weeks of on-site due diligence, where over 2,000 physical files have been reviewed by our due diligence team, enabling us to capture valuation critical information. The binding bid took place mid-November and was followed by a month long SPA negotiation.

The acquisition is underpinned by sophisticated underwriting process, combining data driven forecasting on timings, discounts and costs, as well as a thorough analytical work the on legal statuses and underlying assets. Additionally, we leveraged insights acquired as part of a Secured transaction in July 2018, which consisted of similar loans. Indeed, the short timeframes in France, combined with the seasoning of the portfolio allowed for a substantial underwriting feedback loop on that investment.

Looking at the broader picture, this investment is the concretisation of an organic growth strategic plan devised in late 2017, designed to create a leading acquisition-servicing platform in the French secured market, in anticipation of a then likely market opening which eventually materialised in 2019. This success is therefore a testament to the strategic direction as well as our operational implementation, which has been facilitated by the One Hoist Finance culture and cross-jurisdictional best-practice sharing, notably with the Italian Secured unit. The increased operational scale achieved with this transaction puts us at the forefront to capture a significant portion of the secured pipeline expected to come to market in 2020 and beyond.

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- Annual Report 2019 -
- √Örsredovisning 2019 -