Sareb´s Bank Asset Funds Bring First Profits

24/06/2014 – El Pais

Spain´s bad bank which took the repossessed assets of banks on its shoulders has finally started to register gains, mainly thanks to the sales carried out through a fund called “Bull”.

The Bank Asset Fund (or FAB – Fondo de Activos Bancarios) and two other of this kind created by Sareb have been bringing losses by the end of 2013.

Bull, set up on 26th July together with HIG Capital, integrates 1.687 properties (939 dwellings, 550 parking spaces, 21 retails and 177 storage roms). HIG holds 51% of the stake, whereas Sareb owns the remaining 49%.

Legally, the Fund started to operate on 13th December under management of Intermoney Titulización. In the meantime, Mothinsa named as the administrator of the assets traded in total 128 units for €11.33 million, plus €214.000 more earned by the end of the year.

The money-making housing developments included in the Fund´s portfolio are located at 127 López de Hoyos Street in Madrid and an at 102 San Carlos St. in Alicante (unfinished). The first development stands on one of the 34 plots inherited by Sareb from Bankia.

Now, Mothinsa that is managing the assets inside the Bull portfolio and for which work it received €203.000 from the bad bank last year, sells 61 square meters apartments in the same cluster for €190.000, while for a 4-bedroom unit it asks up to €402.500.

Another asset for sale in the Bull FAB turns out to be more troublesome. The building is situated in the middle of the Lavapiés neighbourhood at 36 Sebastián Elcano St. It disposes of almost 70 empty and walled-up due to eviction homes, as well as 20 rented units.

Until the end of 2013, the Fund has brought to Sareb the first 350.000 Euro return corresponding to the share issue of €24.7 million purchased by the bad bank. The rest of the liabilities lagging behind the Fund since its birth are financed by Sareb itself that granted to Bull a €43 million loan minimum.

By the aforementioned point in time, Bull has caused a €1.67 million loss.

In case of this Fund, HIG injected €26 million, while in case of the Teide FAB, its investor, Fortress, faces no risk. Again it was Sareb that bought €88 million worth of shares (15% of the stake) and lent €58 million to the Fund.

Fortress will obtain 85% of the recurrent yields and a part proceeding from the sale of 2.441 properties included in the Teide Fund that showed €2 million loss at the end of 2013.

In the Community of Madrid, Teide embraces eight housing developments found in Pinto, Villalbilla, Torrelodones or Las Rozas. Altogether they amass 321 dwellings, 383 garage spaces, 16 retails, four storage rooms and a plot.

When it comes to the Corona FAB, Sareb made the bed so it can lie in it. As the only shareholder, the bad bank sold the four rented buildings in the north of Madrid included in the potfolio to itself for €80 million. Moreover, Sareb lended equity to itself, while the Fund brought a €38 million loss.


Original article: El País (by Juan Carlos Martínez)

Translation: AURA REE