LONDON, April 11 Several banks are selling their loan exposure to listed Spanish media giant Promotora de Informaciones (Prisa) after its recent debt restructuring as distressed investors offer attractive pricing for the paper.
Banks, which were traditionally buy and hold investors, are becoming more willing to sell loans as they take a more proactive approach to managing their exposure in stressed and distressed companies.
The growth of the distressed investor base means that banks can get a better price for these loans, which have previously sold at punitive discounts.
BNP Paribas is selling a 50 million euro ($69.40 million) block of loans in Prisa in Europe's secondary loan market in an auction. Bids for the tranche 2 and 3 loans are due on Friday afternoon, banking sources said.
BNP is looking to sell the loans at around 80 percent of face value, a loan trader said. BNP owns around 100 million euros of Prisa's debt. HSBC is one of the largest debt holders, with a position of around 500 million euros, bankers said.
BNP's auction follows a similar sale by Spain's Novagalicia Bank of around 33 million euros of Prisa's tranche 2 and 3 loans last week for around 77.5 percent of face value, bankers said.
Prisa restructured nearly 3 billion euros of debt with its creditors in December. As part of the agreement, Prisa committed to reduce its debt by a further 900 million euros by 2015 and by another 600 million euros by 2016 by various options including debt buy-backs. [ID: nRLP33630a]
"Banks are selling some of their exposure in Prisa now as they can get a good price. This also pushes up the price at which the company might conduct a debt buyback," a loan trader said.
The price of Prisa's loans have risen in Europe's secondary loan market to 76.3 percent of face value on Thursday compared to 69 percent of face value at the beginning of March, according to Thomson Reuters LPC data.
Prisa, BNP and Novagalicia were not immediately available to comment. ($1 = 0.7204 Euros) (Editing by Tessa Walsh)