CaixaBank Gains Ground at the Barclays Sale

CaixaBank takes a good position to acquire the Spanish business of Barclays as the entity chaired by Isidro Fainé has submitted the most interesting non-binding offer so far. The British bank has been even considering closing the sale, however finally it went for opening the final stage of the auction with view to receiving counteroffers and maximising the price.

Today, Barclays is bound to open the data room for the investors. Apart from the Catalonian group, also BBVA, Sabadell, Apollo, Centerbridge, Popular and Bankinter bidded for the portfolio with the two latter losing interest at the latest stage.

Barclays put up for the auction €20 billion in assets, a portfolio including 575.000 customers distributed among 260 offices, €9 billion in deposits and loans with a net value of €18 billion.

There are two drawbacks of the sale: the low profitability of the loan portfolio and the asking price of €1.5 billion set up by the group´s chairman Antony Jenkins.

Original article: Expansión (by J. Zuloaga & A. Antón)
Translation: AURA REE

Foreign Investment in Spanish Groups Surpasses €26.8 Bn in H1

The improvement in the Spanish economy, the entrance of the foreign equity to Repsol after the leave of Pemex, better lending statistics, the need of cutting in indebtness and the bargain property prices were the principal factors that boosted the international investment in the Spanish groups over the first half of the ongoing year.

According to the data gathered by Expansion, foreign companies input €26.8 billion in the Spanish firms and assets. It is worth to point out that during the entirety of 2013 the volume amounted to €20 billion. Some transactions were announced last year but they formally closed in 2014. For example, the takeover bid for Sigma by Chinese WH and Campofrío, the purchase of advisory firm Everis by Japanese NTT Data and the sale of Santander´s property servicer (Altamira) to US fund Apollo.

The largest-volume operation was the acquisition of cable operator Ono by British Vodafone for €7.2 billion.

Energy sector enjoyed huge popularity during the first half of 2014. Thus, Mexican company Pemex sold its 9.5% stake at Repsol for €2.5 billion, while several firms split a 5% share at Iberdrola worth over €1.5 billion. Acciona transferred energy assets to private equity KKR and diverse funds bought 5% at Enagás and 15% at CLH.

The real estate sector is the next main target of the foreign buyers. During the six months, the most significant transactions were the €3.5 billion paid for a loan portfolio of Eurohypo España by Lone Star and JPMorgan, as well as the Colonial stake purchases by Qatar, Colombian and Andorran equity. Moreover, several funds acquired 7.5% at Bankia from the FROB (Spain´s Fund for Orderly Banking Restructuring).

However, the most showy transactions were the sale of the Edificio España building in Madrid to Chinese businessman Wang Jianlin and the purchase of two five-star hotels (the InterContinental in Madrid and the Renaissance in Barcelona) by a Qatar fund. On the other side, Chinese group HNA spent over €180 million on a 9% stake at NH Hoteles until reaching a 29% share in the capital.

British private equity CVC offered a takeover bid for Deoleo and there have been two important operations in the healthcare sector.

The need of debt refinancing pushed FCC towards selling its urban mobility and marketing branch Cemusa to French JC Decaux for €80 million. The company chaired by Esther Koplowitz has earned such big-name investors as George Soros (3% stake) and Bill Gates (6%).

The textile industry has also registered an increased investment from the part of foreign investors. To illustrate, French private equity Eurazeo paid €291 million for 10% of Desigual, while Saudi Alkohair acquired Blanco for €40 million.

Original article: Expansión (by A. Fernández)
Translation: AURA REE

Merlin the Socimi Debuts on the Stock at 10 Euros a Share

30/06/2014 – Expansion

Today, Merlin Properties floats at 10 Euros per share under the ticker MRL, after having sold 125 million shares for the joint €1.25 billion. The amount is smaller than the originally planned €1.5 billion IPO. If the underwriting banks choose to file for the pre-emptive right execution, the quote will enlarge by another €80 million, that is about 6.8% of the total offering. Credit Suisse, Deutsche Bank, UBS, Ahorro Corporación, Banca March, BBVA, BNP Paribas, Deutsche Bank, N+1 and Société Générale coordinated the flotation.

Spanish investors have subscribed to €400 million in committed funds, one third of the total amount. Half of it comes from individual investors and family offices, whereas the rest from national institutions.

Merlin was set up by asset manager Magic Real Estate and it is the third real estate investment vehicle to become listed on the continuous market, following the steps of Lar and Hispania. Moreover, the flotation turns out to be the largest in the last 3 years. The target of Magic Real State is to call the attention of big-name investors, just like Lar that earned support of Bill Gross and Hispania with George Soros and John Paulson as the prominent investors. At the moment, it can count on such funds as Monarch Master Funding and Chenavari Investment Managers.

Merlin has acquired a portfolio consisting of offices and affiliates of BBVA from Tree Inversiones Inmobiliarias for €740 million.


Original article: Expansión (by R. M. R.)

Translation: AURA REE

A Vulture Fund Buys €340 Mn in NPLs From Kutxabank

Basque Kutxabank transferred a €340 million worth of non-performing loans to an opportunistic fund. Great majority of the credits were granted in 2008 and 2009 and they are not backed with real estate assets. Large part of the defaulting loans belong to Cajasur acquired by BBK.

Original article: Expansión
Translation: AURA REE

Santander Lowers Its Mortgage Rates to the Levels Offered by ING

According to the information published on the bank´s website, Santander has cut in differential rate of its best mortgage by 10 basic points to 1.89%, thereby making it equal to the rates of the “Hipoteca Naranja” mortgage offered by ING Direct.

Few months earlier, Bankinter launched an Euribor plus 1.95% mortgage loan known as the “Hipoteca Sin Más”, the only one in the market that foresees an in lieu payment. Some weeks later, ING decided to follow the suit and decrease the attractive rate even more until posting it on the present percentage.

The initiative confirms that the sector senses approaching economic recovery, reviving the lending maket after tough years brought about by the real estate bubble burst. The glimmer of competition is more and more visible among the Spanish banks. Mortgage supply is said to recover gradually throughout 2014.

Original article: Expansión
Translation: AURA REE

Blackstone Opens the First Office in Spain

Blackstone proves serious intentions about investing in Spain. On June 9th, the US giant legally established The Blackstone Group Spain. The investment firm is one of  the most active players on the Spanish real estate market with such noteworthy transactions like the purchase of 1.860 dwellings from the Madrid´s Municipal Housing and Land Company (EMVS) for €128.5 million.

The new branch aims at “providing advisory services related to mergers and acquisitions, as well as objective and potential purchase opportunity identification and conduction of the revision process, analysis and reporting on the identified acqusition targets”.

It will be based at 6 Fortuny Street in Madrid and will start off with a €3 billion social stake and Blackstone Holdings IV LP as its exclusive partner. Vithal Bharadia Vijay has been named as the division´s administrator.

Original article: Expansión (by C. G. Bolinches)
Translation: AURA REE

Banks Give the Green Light to Soros´s Proposal on Refinancing FCC

30/06/2014 – Expansion

Fomento de Construcciones y Contratas (FCC) has successfully closed this year´s largest refinancing in Spain. Its lenders signed an agreement on the €4.53 billion debt payment suspension until 2018. Moreover, at the last meeting, the construction company´s creditors approved extension of the due date for €450 million bonds issued in 2009.

Out of the 35 lenders, Corporación Mondragón-Caja Laboral refused to sign the contract. The entity lent €1 million to FCC, around 0.02% of the total debt scope. The rest of the banks decided to split the amount among themselves.

Apart from the significant refinancing, Esther Koplowitz (the main shareholder of the group via B-1998) is carrying out talks on her €1 billion loan due still before August with BBVA and Bankia. Koplowitz seeks partners to refinance the credit. Soros is the sure candiate but the businesswoman has also negotiated with US funds and investors from the Persian Gulf.

Last week, Soros hired lawyers from Cuatrecasas as legal advisors and proposed buying the debt of Koplowitz and becoming the main stakeholder of FCC.

The loan of the firm comprises of two parts: a nearly €3.2 million one at an interest rate of 3-4% rising annually and an almost €1.35 million indebtness that assumes conversion into equity at 11% to 16% rate.

Around 59% of the entire debt is in hands of Santander that lent €866 million to FCC, CaixaBank – €599 million, BBVA – €523 mn, Bankia – €350 mn and Popular – €345 mn.

Along with the refinancing, the company´s cement manofacturer Portland faces another €1 billion indebtness. At the moment, funds like Apollo, GSO and Avenue Capital hold over 30% of its liabilities which hampers the negotiations.


Original article: Expansión (by D. Badía & C. Morán)

Translation: AURA REE

Merlin Properties Trims IPO to €1.25 Bn As Interest Cools Down

27/06/2014 – Bloomberg

Facing diminishing apetitte of property investors, new Spanish Socimi (REIT-alike firm) Merlin Properties felt obliged to decrease the amount of its initial public offering to €1.25 billion, instead of originally planned €1.5 billion.

The trust will trade 125 million shares at 10 Euros each. It has already raised €600 million in committed funds from Moore Capital Management LLC, among other investors. 

As per the information provided by debt-restructuring company Irea, private equity and other financial institutions more than doubled their investment in Spain in 2013, reaching €13.9 billion

Credit Suisse Group AG (CSGN), UBS AG and Deutsche Bank AG coordinate and underwrite Merlin’s IPO. Freshfields Bruckhaus Deringer LLP act as legal advisors.


Original article: Bloomberg (by Ruth David)

Summary: AURA REE

The Government Bets on Housing Model in Line With European Partners

Spain´s Minister of Development Ana Botella informed the Senate about the Government´s decision to gamble on a housing model similar to the one found in other European countries, giving priority to rent, refurbishment and urban regeneration.

In its recent “National Reform Programme Spain 2014” progress report, the European Commission stated “measures have been taken to add to size and efficiency of the rental market”.

When it comes to social housing, “it turns slowly towards lease” having in mind that traditionally ownership of houses have predominated in Spain.

As Botella proves, the President kept his word and intended €2.31 billion for the housing matters included in the “State Plan 2013-2016”.

After reminding how important is ruling of the housing sector for the overall health of the country´s economy, the Minister recalled the new regulation on renting (Law 4/2013) which allows boosting the lease market as a successful alternative of enhancing access to the property.

In regard to refurbishment, the Law 8/2013 concerns building renovation and energy efficiency system. The regulation lifts up numerous legal and administrative obstacles which used to restrain refurbishment works, at the same time enhancing their execution and financing, as well as technical and economical viability. What is more, for the first time there appears a uniform economic limit for property maintenance requirements for the owners.

Finally, in financial terms, capital gains will be added to refurbishment works.

Moreover, the new plan regulates the housing aid eligibility. Basically, it foresees public help for mortagage subsidizing granted in the frameworks of the previous State Plans, rental support for families and other co-habitance units with limited resources, as well as aids for urban refurbishment, renovation and regeneration.

Original article: Inmodiario
Translation: AURA REE

Housing Values on the Coasts Go Down to the Bottom

Areas close to the coasts have watched housing fever during the real estate bubble growth, later on followed by the wiping-out burst. As usual in the sector, improvement does not come up equal in all places, varying at the city and even the district level.

In its “Costa Española 2014″ (“Spanish Coast 2014”) report, leading appraisal company Tinsa stated that “there are promising signs of more vivid developer activity in occasional consolidated areas”. The study analyzed data obtained from the real estate market in 100 coastal cities.

Referring to “occasional” areas, the firm means mainly Costa del Sol and Costa Blanca where “both prices and permits number increased depending on location and asset type”.

Moreover, Tinsa explains that “even thought new construction remains halted in general, the shoreline of, for example, Alicante has observed rise in building permits issues”. The phenomenon is right now extremely difficult to find in Spain.

Across-the-board, Tinsa spots “stabilization” in values, above all in the aforementioned areas (Malaga stands out), as well as in the beach zones of Levante and Catalonia where residential assets already creep towards the bottom, while the slump continues in Cadiz, Huelva and Tarragona.

According to Tinsa, the Mediterranean Coast accumulates a 47.7% drop-off since the maximum levels in 2007, almost by 8 bps more than in the rest of the country. “The Canary Islands have overcome the recession best”.

Coastal municipalities where the home depreciation hit the most acutely are Casares (Malaga) with nearly 60%, Pineda de Mar and Mataro (both in Barcelona) with 57.2% and 52.2% respectively. On the other side, Barbate (-26.7%), A Coruña (-28.3%) and Manacor (-28.6%) registed the slighest declines in property values.

Weighting the tendency up in annual terms, prices advanced in Marbella (Malaga 4.8%), Sant Feliu de Guixols (Girona, 2.5%), Las Palmas de Gran Canaria (1.5%) and Manilva (Malaga, 1.3%).

Speaking of the foreign purchase, Tinsa points out that “Russians and the buyers from the Central and Eastern Europe prevail when it comes to holiday accommodation, inclining towards luxury products, principally on the coasts of Catalonia and Malaga”.

At this point, it is worth to mention that in 2013 expats carried out over 35% of all purchases in Alicante, Gerona, the Balearic Islands, Santa Cruz de Tenerife and Malaga.

In the first quarter of 2014, foreigners bought the most property in Tarragona (51%), Santa Cruz de Tenerife (44%) and Malaga (38%).

The report also informs that the sale term extended significantly over the past 12 months in great majority of the localizations. However, gradually the time necessary for selling a property shrinks, mainly due to bargain prices slashed by banks, involuntary holders of the stock for sale.

Overally, Tinsa claims the housing values will keep falling until the end of the year and since 2015 a new stage of sector recovery will begin.

Íñigo Valenzuela, Marketing Director at Tinsa predicts the “positive” data we are observing nowadays will lead to an absolute “zero” at the end of 2014.

Original article: Expansión (by Juanma Lamet)
Translation: AURA REE