Project Babieca: Bankia Puts €672M Portfolio Up For Sale

21 October 2015 – Idealista

Bankia has put another debt portfolio up for sale, worth almost €700 million and secured primarily by commercial assets (offices and shops), land and industrial assets. The project has been named ‘Babieca’ like the legendary horse of the hero El Cid Campeador.

Bankia is continuing with the process to reduce the real estate exposure on its balance sheet and to that end, has put another loan portfolio up for sale, a technique that has been used all over the world, during the process to clean up the financial sector. In this case, the so-called ‘Project Babieca’ is in the hands of the consultancy firm PwC, which is looking to place the portfolio, worth €672 million, with international investors, according to financial sources consulted.

The portfolio comprises 3 different sub-portfolios, but Bankia hopes to sell them all to a single buyer:

Portfolio Jimena: contains loans amounting to €115 million, primarily secured by land (specifically, 81% is guaranteed). This debt is shared between 9 borrowers, none of which have filed for insolvency to date.

Portfolio Elvira: contains debt amounting to €172 million, of which 78% is backed by commercial assets (offices and shops) and industrial assets. This debt is distributed between 40 borrowers, of which 18 have fallen into arrears.

Portfolio Sol: contains debt amounting to €384 million, of which 73% is secured by commercial assets. This tranche is spread between 30 borrowers, 22 of which are solvent.

According to the sources consulted, Bankia expects to receive non-binding offers from a handful of investors by the middle of October and to receive binding offers by the middle of November. In this way, it hopes to close the sale of this package in December.

If it manages to complete the sale before the end of the year, Bankia will be able to add the achievement to another sale it has already completed of another debt portfolio worth €1,300 million, which mainly contained doubtful mortgages to individuals. That package known as ‘Project Wind’ was awarded to the funds Oaktree and Chenavari (in July).

Bankia has also closed another operation this year, the sale to Bank of America of a hotel debt portfolio at the beginning of June. That operation, known as ‘Project Castle’ comprised 91 operations linked to 45 assets. 56% of the total portfolio related to doubtful debts.

In addition, Bankia has another package of real estate assets up for sale at the moment, the so-called ‘Project Big Bang’, which includes a portfolio of residential and commercial assets and land, worth €4,800 million. This is a sale that the bank is also looking to accelerate and one that would represent the largest sale of real estate assets since the real estate bubble burst.

Original story: Idealista (by P. Martínez-Almeida)

Translation: Carmel Drake

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