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EBA NPL Transaction Templates Summary

Introduction

The European Banking Authority (EBA) has developed two sets of templates for Non-Performing Loans (NPLs): the EBA NPL portfolio screening template and the EBA NPL transaction templates. These templates are designed to address the data needs during the screening and financial due diligence (FDD) and valuation phases of NPL transactions. They are part of the EBA's response to the European Commission and Council's call to reduce information asymmetries and support the development of a functioning secondary market for NPLs in the EU.

The EBA NPL transaction templates offer the most granular and extensive data fields, enabling potential bidders to conduct detailed FDD and valuation. In contrast, the portfolio screening template provides a subset of these fields and is used for market sounding. These templates are intended to be used by institutions and investors to ensure comparable and standardised data on NPLs. However, they are provided "as is" with no guarantees of completeness, accuracy, or timeliness. Users must also comply with data protection, legal, accounting, and tax obligations, and are encouraged to use Non-Disclosure Agreements (NDAs) or Confidentiality Agreements (CAs) where necessary.

General Instructions

The EBA NPL transaction templates are structured into the following components:

• Instructions: Provide guidance on how to use the templates.
• Data Dictionary: Lists all data fields and their definitions.
• Data Tape: The actual file to be filled in by the institution with NPL portfolio data.
• Validation Rules: Help in validating the consistency of data across fields.

The templates include data fields categorized into the following groups:

• Portfolio
• Counterparty Group
• Counterparty
• Relationship (Borrower - Loan)
• Relationship (Tenant - Lease)
• Relationship (Guarantor - Guarantee)
• Loan
• Historical Collection and Repayment Schedule
• External Collection
• Forbearance
• Property Collateral
• Relationship - Property Collateral
• Lease
• Non-Property Collateral
• Relationship - Non-Property Collateral
• Enforcement
• Swap

The templates aim to provide a baseline for supporting NPL transactions, but additional data may be required depending on the specific portfolio and transaction. The data fields are classified by criticality (Critical, Important, Moderate) to help users prioritize the information for FDD and valuation. Additionally, some fields are marked as static or dynamic based on whether they are likely to change between data tapes with different cut-off dates.

Asset Class Breakdown

The EBA NPL transaction templates categorize NPLs into the following asset classes:

1. Residential Real Estate Loans

• Secured by immovable property used as a residence.
• Includes primary residence, holiday homes, and development loans for residential property.

2. Commercial Real Estate Loans

• Secured by commercial immovable property.
• Includes properties rented out and used for commercial development.

3. SME / Corporate Loans

• Loans to enterprises or SMEs, regardless of legal form.
• May be unsecured or secured by real estate or non-real estate collateral.

4. Unsecured Retail Loans

• Includes credit card receivables and unsecured consumer loans.

5. Leasing Loans

• Secured by movable non-property collateral, such as equipment.

6. Auto Loans

• Secured by motor vehicles, granted to private individuals.

7. Specialised Loans

• Includes project finance, infrastructure, and public sector loans.

Country Specific Instructions

The templates include country-specific data fields that reflect the restructuring and insolvency procedures of the 28 EU member states. These fields are marked in the Data Dictionary and are intended to support initial country-specific analysis. However, they do not replace legal due diligence and should be confirmed by qualified legal counsel.

Conventions for Data Entry

• If not otherwise stated, figures are reported as positive numbers.
• Boolean fields use "Yes" or "No".
• Choice fields use predefined codes from classifications such as NACE, ISCO-08, UN/LOCODE, and ISO codes.
• Text fields allow free text entry.
• Number and Percentage fields are expressed to two decimal places.
• Confidentiality indicators are marked with red (1) for all countries, orange (2) for some countries, and blank for non-confidential data.
• Static vs. Dynamic fields are marked with green (1) for asset class-specific data and blank otherwise.
• Missing data is indicated using specific codes:
  • ND,1: Not collected as not required.
  • ND,2: Collected at application but not loaded.
  • ND,3: Collected in a separate system.
  • ND,3,MM-YYYY: Data available from a specific date.
  • ND,4: Not relevant now.
  • ND,6: Not applicable in the jurisdiction.

Data Tape Usage

The data tape is used to report Active Loans that are part of the NPL Portfolio as of the Cut-Off Date. An "Active Loan" is one where cash inflows or outflows may occur in the future.

Key Definitions

• Cut-Off Date: The date used as a reference for the underlying asset data.
• Counterparty: Includes borrowers, guarantors, and tenants.
• Counterparty Group: A group of related counterparties.
• Cross Default: Indicates whether a breach in one loan triggers a default in others.
• Cross Collateralisation: Indicates whether collateral from one counterparty is used for multiple loans within the group.
• Legal Type of Counterparty: Based on the sponsor's type, as defined in the Type of Sponsor field.
• Joint Counterparties: Multiple parties jointly owning parts of a loan.
• Personal Details: Includes date of birth, personal identity number, nationality, residence, and income, all marked as confidential where applicable.

Conclusion

The EBA NPL transaction templates are a comprehensive and standardized framework for reporting NPL data. They aim to reduce information asymmetry, support transaction processes, and ensure consistency with EU regulations. Users must ensure data completeness, accuracy, and compliance with data protection and legal obligations, and are encouraged to use NDAs or CAs for confidentiality. The templates are a guiding tool but not a substitute for legal due diligence or market-specific practices.