Martinsa Fadesa lost 582 million Euros in 2012 after facing strong provisions.

Martinsa Fadesa, who suffered the biggest creditor´s meeting in Spanish history in 2008, continues enduring the effects of the deep construction crisis. The real estate company closed 2012 with red number of 582,8 million Euros, a similar figure to the losses registered the previous year: 584,7 million Euros.

The revenues of the group reached 160 million Euros, 11% less than in 2011, while the gross margin was negative in 5,7 million Euros, a figure sensibly lower than the negative 50 million Euros of the previous year. According to Martinsa, this recovery “has been a consequence of the sale of assets at a price very near to the their valuation price”.

The real estate company reduced its expenses by 11%, down to 36,6 million Euros and decreased the red numbers in its ebitda down to 7,8 million Euros opposite to the 135 million Euros of 2011.

Martinsa, which faced repayments and provisions based on the deterioration of its assets for 386,8 million Euros, closed last year with a debit side and a patrimony of 3531 million Euros, 702 million less than in December 2011.

Source: Expansión

The Euribor in February will reduce mortgages by 60 Euros per month.

The Euribor, the main mortgage reference rate in Spain, will give mortgage holders a new break. It has closed February at 0,594% and it will reduce the price of mortgage installments (with annual revision) around 60 Euros, reaching nearly 750 Euros per year.

Although the rate has registered its second consecutive increase after reaching its historic minimum (0,549%) in December, it is still far from the level reached in February 2012 (1,678%). A difference which brings a discount in the mortgages.

An average mortgage of 120.000 Euros for 20 years and annual revision will see its installments reduced in around 62 Euros if it is revised in February. The periodic payments will go from 646 Euros to 584 Euros.

This discount will be much less in those mortgages with biannual revisions. Those which were revised in August, when the Euribor was at 0,877%. In those cases the monthly installments will go from 600 Euros to 584 Euros.

Looking to the future, the Euribor looks downwards. Since the ECB maintained interest rates at 0,75%, this rate has not ceased to decrease. It accumulates15 days with a downward tendency and seems ready to surpass its historic minimum reached in December. (…)

Source: El Mundo

BMN transfers 5820 million Euros and Ceiss transfers 3140 million Euros to Sareb

BMN, Banco Caja España Duero (Ceiss), Liberbank and Caja 3, the four institutions within group 2, announced yesterday the formalization of the management agreements signed with Sareb this week. They will transfer 14000 million Euros in properties and damaged credits to the bad bank. This transfer should take place tomorrow.

According to the figures provided by the institutions, BMN will transfer assets with a net value of 5819 million Euros and Caja España Duero, a total of 3137 million Euros. The assets transferred by Liberbank are around 2918 million Euros and Caja3, who will integrate itself in Ibercaja, will sell another 2212 million Euros to Sareb.

With the acquisition of this 14000 million in assets, plus the 37000 million Euros transferred by the four nationalized institutions in December, Sareb will have around 51000 million Euros in its balance.

In order to support these assets, Sareb will have equity funds for 4800 million Euros. They have been provided by the shareholders in two capital extensions and through the subscription of two emissions of subordinate debt. The last one of these closed yesterday.

(…) The investment of Generali and Zurich reaches five million Euros each, while the contribution by Reale reaches 3 million Euros and Santa Lucía, 4 million Euros more.

Santander, Caixabank, Sabadell, Popular and Kutxabank continue to be the main private shareholders. BBva and the main international funds are the great absentees. (…)

Source: Expansión

Sareb hires the financial director from Frob.

Gomez will be responsible of the Finance area of the bad bank, one of the key positions along with the director of risks.

Since 2009, Gomez has held the position of financial and strategy director of Frob, where he participated in the creation of the institution that acts as the authority for the credit institutions in Spain. He was also a coordinator in the constitution process of Sareb.

The bad banks has also reinforced its managing team with the hiring of Francisco Gonzalez Paz as responsible for communication.

He has a degree in Journalism by the Universidad CEU San Pablo in Valencia and has an experience of more than 15 years in economic and international press within the EFE agency. Up to now, he was the head of the area of Finance and Markets of the public agency. (…)

Source: Expansión

The Government extends one more year the decree that avoids the bankruptcy of the real estate companies.

The government of Mariano Rajoy has listened to the requests of the real estate sector and has decided to extend one more year the royal decree-law 12/2008, which allows companies not to reckon the losses based on the deterioration of real estate investments and stock.

This tax exception was approved in 2008 by the government of Rodríguez Zapatero, and has been extended up to the last 4th February.

The main real estate associations, such as the G-14 and the APCE, alerted of the consequences of not extending this norm: a wave of creditor´s meetings of companies and not only real estate ones.

Finally, last Saturday, the government published in the official state gazette the modification of the royal decree law. (…)

The novelty within this extension is the application scope of this measure, as the losses needed to determine if a company enters a creditor´s meeting will not be taken into account.(…)

Source: Expansión

The bad bank already has half of its staff.

The president of Sareb or bad bank, Belen Romana, has reinforced the managing team of the institution with the hiring of more professionals, high level managers, middle management and employees. The bad bank has already hired half of its staff, according to sources closed to Sareb. It has incorporated 46 employees since its creation and it plans to close its workforce with one hundred professionals before the end of March 2013, when it hopes to be in full operation.

Nevertheless, finding the best prepared candidates is the first target, and therefore there are no specific time limits to end the hiring process. The company, which is immersed in a hiring process, is currently interviewing candidates, under the supervision of the director of means, Alfredo Guitart.

In its web page, still under construction, the bad bank has opened up an email address so that those interested can send their résumé. It also works with the aid of headhunting companies specialized in hiring personnel. The headhunter Spencer Stuart was in charge of Romana´s recruitment, whose candidacy was backed by the Minister of Economy, Luis de Guindos. Currently, 63% of the workers of Sareb belong to the areas of real estate assets and legal advice, giving permanent support to its operations. The bad bank is looking to organize an agile, efficient and a limited but operative structure. It will only have 100 employees as the management of the toxic transferred assets is in the hands of the nationalized and the group 2 institutions for an extendable period of one year. It does not wish to create a very dense structure as it will only be in operation for 15 years.

(…) The professionals will earn a maximum of 500000 Euros per year.

Source: Expansión

Banesto contributes with properties worth 392 million Euros to Altamira.

Altamira Real Estate, the main real estate company of Santander, closed 2012 with losses of 609 million Euros. Halfway through 2012, Altamira signed the merger through absorption with Mesena, the main real estate company of its subsidiary Banesto. After the integration and the operations of contribution of properties made by Banesto to comply with the financial reform of the Government, its participation in Altamira reaches 19,6%.

On the 28th December 2012 and according to the Law 8/2012 on restructuring and sale of the real estate assets of the financial sector, the contribution of non monetary capital from Banesto to Altamira took place (…) with the contribution of properties worth 392,45 million Euros”, the annual report indicates.

They were covered with 433,63 million Euros (52% in average), which increases their gross amount to 826 million Euros. “Simultaneously, the 28th December, Banesto sells to Santander 1,69 million shares of Altamira for a total price of 183,19 million Euros”, it explains.

Along with Mesena, Banesto created the real estate company Promodomus, joint company with Reyal Urbis, who requested the creditor´s meeting this week. Reyal owes Santander Group 550 million Euros and 150 million Euros to BBVA.

Santander has a real estate exposure of 23.705 million Euros.

Source: Expansión

BBVA´s bad bank increases its losses to 1985 million Euros.

The Anida Group concentrates, mainly, the portfolio of properties. In order to manage all risks linked to this sector, the bank created at the end of 2011 the division BBVA Real Estate. It includes, as well as the housing and land portfolios, all credits to developers and the shares in real estate companies.

Anida Real Estate Group (the bad bank of BBVA) and its sister company, Anida Operations, have had to carry out big provisions to cover the portfolio of properties absorbed within the two Royal Decree-Laws of the Government.

The pending resources needed to reach the required coverage have caused great losses at Anida, the above mentioned 1985 million Euros. These are really no red figures, most of these losses are journal entries that reflect the devaluation of properties and the effort made in provisions to cover it.

BBVA sold 12000 properties last year, with an average discount of 40%, as announced by the institution in the presentation of the annual results. The bank now has 41000 properties.

These negative results have caused the consumption of all its patrimony, so that now it has a negative balance of 857,96 million Euros. BBVA will now reestablish the patrimonial equilibrium of its sister company mainly through the capitalization of equity loans, according to sources close to the group.

BBVA has closed the year 2012 with a real estate exposure of 27417 million Euros in Spain, with credits and allocated properties. This risk is provisioned with 11828 million Euros, which is a coverage of 43%. The exposure has increased by 8,42% in reference to 2011. Part of this increase is a consequence of the acquisition of Unnim, in March 2012.

At the end of 2012, BBVA swelled its group of participated companies with 47 real estate companies from Caixa Sabadell, Caixa Terrassa and Caixa Manlleu, all founders of Unnim. In most cases, the bank controls 100% of these companies, although there are some with other shareholders. One of the biggest ones is Promotora del Vallés, the previous real estate company of Caixa Sabadell.

Source: Expansión

Clifford Chance and CBRE will value the bad bank´s assets.

Sareb has awarded the valuation of its property and mortgage portfolios to a consortium lead by the law firm Clifford Chance and the real estate consulting company CB RIchard Ellis (CBRE).

The firm lead by Belen Romana announced a few weeks ago a tender requesting proposals on how to value and manage the bad bank´s portfolio from multidisciplinary teams, lead by the main law firms in the country. “We need to do a due diligence so as to know what has been transferred and to verify all legal aspects of these assets”, Alberto Prieto, general director of Knight Frank, explained during the presentation of the Association of Real Estate Consultants.

In the specification sheet, the bad bank requested that a law firm, a real estate consultant, an auditor and a supplier of technological services should be part of the team. “We need to have all necessary information, we need to know the assets and make sure they have all have the required documents in order to be able to sell them”, Santiago Aguirre, president of Aguirre Newman, stressed in that same press conference.

Five consortiums took part in the tender, all lead by the law firms Garrigues, Cuatrecasas, Uría, Clifford Chance and Freshfield.

The main real estate consulting companies present in the Spanish market also took part in the tender: Aguirre Newman, BNP Paribas Real Estate, CRBE, Jones Lang La Salle, Cushman & Wakefield and Knight Frank. As for auditing companies, there were Ernst & Young, KPMG and Deloitte and in the technological sector; IBM and Accenture.

Each consortium made its proposal of services and also of a budget.

Finally, the winning candidacy is made of 13 firms: 6 law firms (Gomez-Acebo Pombo, Pérez Llorca, Ramón y Cajal, Deloitte Abogados, Broseta Abogados, lead by Clifford Chance) and five valuation companies (Gesvalt, Savills, Knight Frank, Cushman & Wakefield and CB Richard Ellis, who leads the process). The firm of professional services KPMG will provide services of transfer prices revision, while IBM will be in charge of the technological solutions and the data bases. (…)

Source: Expansión

RPT- Spain's banks face more pain from property clear-out.

Banks in Spain may take bigger losses than they hoped this year on real estate repossessed from borrowers, as they compete for buyers with Sareb, the agency tasked with clearing up the weaker banks after a property crash.

Banks were left holding hundreds of thousands of houses, half-built commercial and residential developments and plots of land after borrowers and developers ran into trouble when the property boom turned to bust in 2008.

Property-related losses eventually forced the government to secure a 40 billion euro ($53 billion) bailout for its banks from Europe.

Last year, the banks wrote down foreclosed property on their books by around 40-50 percent after government decrees forced them to make provision for losses and reflect lower market values. The clean-up helped them start selling housing at discounts, mainly to individuals, but with the country in a deep recession and unemployment at 26 percent, demand for property is weak even at knockdown prices.

But now lenders face competition for buyers from Sareb, the “bad bank” set up to manage up to 60 billion euros’ worth of assets from bailed-out lenders, which put its first lot of 13,000 properties up for sale at the end of January.

Since Sareb, set up at the request of Brussels, is taking over assets from rescued banks at discounts that are steeper than those forced on the sector by the government, the fear is that its disposals will push down prices and clog up the market.

Yet if Spain’s healthier banks turn to private equity firms and hedge funds to help shift their assets, they might have to swallow more losses too. Four investment bankers in Madrid said funds typically demanded discounts of 60-80 percent.

“The sale of secured assets to investors would likely be done at prices below those of the Royal Decrees (the government-enforced clean-up), with big discounts,” said Fernando Acuna of Taurus Iberica, which markets banks’ properties and advises them on portfolio sales.

“The discounts from the decrees were more in line with the prices seen in the normal consumer market.”

But what is normal once Sareb is selling in volume? Early estimates had put the properties Sareb would house at 89,000, though Sareb said that could change.

There are about 200,000 repossessed properties in Spain, on top of 1 million newly built homes for sale, rating agency Fitch estimated in December, adding that banks had on average been selling properties last year at half the price they were originally valued at.


Property prices have already slumped 35 percent from a 2007 peak, according to real estate valuations group Tinsa, and Fitch forecast recently they had another 15-20 percent to fall.

Banks able to take another hit could now start selling portfolios to investors to move quickly with disposals, bankers said.

Santander, which has said it wants to aggressively shed property assets this year, is setting aside 1 billion euros in its 2013 budget to cover possible portfolio sales at a “significant discount”.

“If we can get in there before the Sareb starts achieving cruising speed, so much the better,” Chief Executive Alfredo Saenz said in January during a results presentation. Capital gains from sales of other items would offset the hit, he said.

U.S. funds Centerbridge, Apollo, Fortress, Lone Star and Cerberus are among those actively circling the Spanish market for property assets, investment bankers said.


Not all Spanish banks will want to take more immediate pain from their property problems, with Santander and rival BBVA , the country’s top two banks with large overseas operations, better able to weather writedowns than most.

Selling to individuals is slower than shifting portfolios but typically costs less, because individuals are not necessarily looking to turn a profit like funds are.

BBVA for example said it had sold 12,000 foreclosed properties last year at an average 40 percent discount, mainly by selling them piecemeal.

But asset values risk dropping the longer properties sit on banks’ books, and lenders may struggle to sell anything beyond their better assets to individuals at attractive prices.

House prices have fallen more sharply on the Mediterranean coast, where developers erected kilometres of resorts that now stand empty, than in city areas, according to Tinsa.

Funds are also interested in the best real estate, such as commercial developments or upscale flats in the centre of big cities, but they might also help banks shift less attractive ones at heavily discounted rates, bankers said.

Foreclosures are also still rising – up over 18 percent in the first nine months of 2012, court data shows – adding to the pressure to sell existing stock. And developers are still collapsing, with major real estate firm Reyal Urbis filing for insolvency on Tuesday.

While banks have no firm timelines to rid themselves of properties, keeping big exposures could also hinder their funding prospects as they try to cut their reliance on central banks and turn to bond markets instead.

“Spanish banks seeking to target international investors as a source of funding must now reduce their exposure to real estate assets to help regain investor confidence,” Fitch analysts Carlos Massip and Juan David Garcia said in a December report.

Source: Reuters