Soured Loan Volume in CatalunyaBanc Reaches 22.3% Cap

26/06/2014 – El Confidencial

As per rating agency Moody´s, at the end of the first quarter of 2014, default rate at CatalunyaBanc shot up and stood at 22.3%. The score puts the bank in negative outlook in the light of the ongoing auction of the entity.

The volume consists of non-performing, sub-performing and awarded loans. Nevertheless, Moody´s admits that putting the €6.5 billion NPL portoflio apart might improve the rate which presently ranks the worst among the Spanish banks. The entity has already registered better figures in terms of deleveraging and coverage.

The US agency points out that even though the bank transferred all troubled loans to Sareb, its assets went on loosing their value. “After falling to 16.4% at the end of 2012, the rate jumped again in the first quarter of 2014”, Moody´s justifies the B3 mark . The entity itself told the rate post 13% at the end of 2013 but has not given the exact number of the doubtful loans.

Around 20% of the “Hercules” corresponds to highly demanded loans. Not the default itself is the biggest problem but the dramatically low profitability of the entity. According to the provided by the agency, without the carry trade CatalunyaBanc´s average profitability per benefit before provisions on risk-weighted assets shows a paltry 0.4%.

If that weren´t bad enough, Moody´s warns about the certain risk that the bank might fail the ECB´s stress test.

Given all that, the bidding has been abandoned leaving only Santander and La Caixa on the battle field. Still, the Frob (the Fund for Orderly Banking Restructuring) may count on an interesting price thanks to the merger of Caixa Catalunya, Manresa and Tarragona.

 

Original article: El Confidencial (by Eduardo Segovia & Agencias)

Translation: AURA REE

Savia Asset Management Acquires €1 Bn in NPLs of SMEs From CaixaBank

25/06/2014 – Expansion

Savia Asset Management, chaired by Santander´s president´s son Javier Botín, bought over €1 billion in unpaid loans of SMEs and a part of credits granted to big companies, found inside the huge NPL portfolio of CaixaBank known as the “Flanders Project“.

 The sale attracted other prominent investors like Cerberus, Oaktree, Elliot, Aiqon, Fortress and Marathon.

Botín´s firm purchased the lot together with Perry Capital, U.S. fund that handed over a major part of the due amount. Savia will manage and collect the debt.

Before this transaction, the partners acquired also NPLs from Liberbank and Popular. The operation is said to involve €40 million.

Savia was founded two years ago and currently the firm employs 140 experts. Last year only, it bought seven bank portfolios (CaixaBank, Bankia, BMN, Liberbank, Ibercaja, Popular and BBVA) valued altogether at nearly €5 billion.

The portfolio acquired now includes around 33.000 unpaid loan records, mainly in Catalonia, Madrid and Andalusia.

The Flanders package contained also a portfolio with loans of SMEs, backed with such property as offices, industrial warehouses or retails. This part, worth €70 million, has been purchased by U.S. fund D. E. Shaw.

In parallel, CaixaBank is carrying out another sale of the “Valonia Portfolio” consisting of corporate loans valued at €1.05 billion. Out of these, €700 million have got no real estate guarantee, while €350 million do have it. More than a half of the properties is located in Madrid and Andalusia.

 

Original article: Expansión (by Jorge Zuloaga)

Translation: AURA REE

George Soros Invests €330 Mn in Spanish Listed Firms Within 6 Months

24/06/2014 – Expansion

The billionaire has neither decided to gamble on the Wall Street, nor on the largest banks in the world. Instead, George Soros is going to focus on investment in the Spanish market. At the moment, he is working on acquisition of 0.5% at Liberbank, a stake worth €5 million.

In only six past months, the magnate spent €332 million on shares in listed companies in Spain. He started in December 2013 with the purchase of 3% at FCC for €55 million. In April, Soros bought around 17% at Hispania for €92 million. Shortly after, he took a 0.02% share at Iberdrola for €6 million. And in May, the investor acquired 1% at Bankia for €174 million from FROB.

Next, he will probably target the financial sector again as he already takes part in the bidding for the loan portfolio of Catalunya Banc, offering between 3 and 3.5 billion Euros for it.

But, why Spain? In February, Soros assured that his investment team expects to “make a lot of money in Europe, for example by pumping equity in the banks needing the equity urgently”.

 

Original article: Expansión (by Estela S. Mazo)

Translation: AURA REE

Cajamar on the Verge of Selling RE Manager For €200 Mn

10/06/2014 – Cinco Dias

Cajamar is going to close the sale of its property servicer Cimenta2 for more than €200 million today or tomorrow. Apollo which bought Altamira from Santander last year and Cerberus owning Bankia Habitat are the finalists at the bidding.

Cajamar, the first Spanish cooperative credit bank, points out in the deal that the purchaser will obtain a 10 year exclusive management and marketing of its assets that will remain in the bank´s balance sheets. Also, the contract assumes recovery of the entity´s NPL portfolio valued at €7.3 billion.

As per the sector, the price for the real estate servicer is pretty high. For instance, BMN sold its management firm for €50 million, whereas the sale of Catalunya Banc´s servicer brought about €40 million. Bankia earned between 40 and 90 million Euros and CaixaBank received €98 million for Servihabitat.

However, Santander sold its Altamira for a much higher amount (€664 million), as well as Banco Popular (€715 million).

For Cajamar, shedding servicer will mean improvement facing the looming stress test. In fact, the entity´s directors do not bother about the examination being sure Cajamar will pass them without a slighest trouble.

 

Original article: Cinco Días (by Ángeles Gonzalo Alconada)

Translation: AURA REE

Five Big-Name Bidder Teams Explore Catalunya Banc´s €6.5 Bn Loan Portfolio

10/06/2014 – Expansion

At first, twelve groups of foreign investors showed their interest in buying the “Hercules“. Out of these, five were picked for the next stage of the bidding: Oaktree, George Soros, Lone Star, Cerberus – Goldman Sachs and Blackstone – TPG.

The aforementioned funds have been the most generous offering between €3 and 3.5 billion for the loan package and now they will be allowed to study in depth data about each asset inside the €6.5 billion portfolio.

In the first sieve, the nationalized bank excluded several funds with their own real estate servicer to deal with soured assets and which now would be inclined to join better ranked investors.

This way, Oaktree teamed up with the consortium of Pimco-Marathon-Deutsche Bank and Finsolutia, while multimillionaire Soros allied with Värde Partners that acquired Aliseda, property manager of Banco Popular.

Moreover, Lone Star and Apollo-Centerbridge came to an agreement, raising even more the interest evoked around the CatalunyaBanc´s mortgage auction.

The five finalists will soon receive terms and conditions for the final offers.

 

Original article: Expansión (after Efe)

Translation: AURA REE

Banks to Shed €20 Bn in Soured Loans in H1

9/06/2014 – Expansion

From an unwanted to one of the most desired assets. Around €20 billion in Spanish banks´soured loans (unpaid mortgages, developer credits, loans to currently insolvent SMEs and overdrafts) are on the straight way to mark the first half of the ongoing year.

These transactions will provide the banks with at least €7 billion gains, even though some of them involve up to 98% discounts. Real-estate backed loans reach higher prices. For instance, at the recent sale of loan portfolio of Eurohypo in Spain the buyers, Lone Star and JPMorgan, paid 80% of the €4.5 billion total value.

The increased activity on the loan market confirms growing confidence in Spain´s economic recovery. Before, only 5 or 6 funds bidded for such a portfolio but now an auction is attended by around 40 potential purchasers.

The tendency may be as well explained by another factor: deleveraging. Large international investment entities poach distressed assets to finance them. For that, Spanish banks began to add more and more properties to loan portfolios, indirectly though. This mostly happens through putting credits granted to now insolvent SMEs which tied-up real estate as collateral (shops, industrial property and even own houses of the debtors).

The strategy turned out to be a gran success allowing the FROB (Spanish acronym for the Fund for Orderly Banking Restructuring) and Catalunya Banc put up for sale one of the top loan portfolios of the year: the €6.5 billion Hercules. Over 40 funds vied for the package and the finalists are: teamed-up Soros and Värde, Pimco, Marathon, Oaktree, Deutsche Bank and Finsolutia, Apollo, Centerbridge and Lone Star, Blackstone and TPG and allied Cerberus and Goldman Sachs.

Although initially the sale was expected to bring about €2 billion, the thrilling competition has driven non-binding offers to up to €3.5 billion. The turn permits the FROB to lower considerably the public aid intended for asset damage covering to below €1 billion.

Deals like the Eurohypo´s Octopus sale or the ongoing Catalunya Banc´s Hercules auction encouraged Bankia to put up for sale its €430 million in REO and developer loans. At the beginning of the year, the bank sold another portfolio called “India 6”.

Other large entities like Santander, CaixaBank or Sabadell are also pondering shedding their soured loans.

Original article: Expansión (by Jorge Zuloaga)

Translation: AURA REE

Apollo Pleads €400 Mn Syndicated Loan for Purchase of Altamira

6/06/2014 – Expansion

Apollo asked for over €400 million in syndicated loan to finalize the purchase of 85% of Altamira, Santander´s property manager. The transaction was sealed at the beginning of 2014 at final price of €664 million.

Financial deleveraging is a habitual tool of opportunistic funds striving for an increase in profitability. Usually, they aim at obtaining a 20% return within a 5 year term. Obviously, such operations casts high risk that might even lead to loss of the entire investment.

Altamira Asset Management, fusion of three branches: Altamira Santander Real Estate, Reintegra and Elerco, will manage and market €8 billion worth of Santander´s assets for 12 years with an extension option.

Purchase contract assumed that Santander will re-buy a 15% stake in the real estate manager.

The operation included transfer of 500 employees from Santander to the new Altamira, although annual results mention only 272 employment agreements: 183 of Santander, 60 of Altamira Santander Real Estate, 7 of Reintegra and 22 of Elerco.

To supervise and lead the project from the position of the CEO, Apollo hired ex-executive of Citi, Julián Navarro. Andrés Rubio was named the president of the servicing firm. The two experts got a task to expand Altamira by intending €1 billion for the real estate investments. In this context, Apollo explored purchase of the portfolio of Eurohypo and is now taking part in the bidding for CatalunyaBanc´s “Hercules“.

 

Original article: Expansión (by J. Zuloaga)

Translation: AURA REE

Soros Barges In the CatalunyaBanc´s NPL Portfolio Bidding

6/06/2014 – Expansion

The sale of soured loans of CatalunyaBanc has been joined by an unexpected bidder: multimillionaire George Soros, who submitted one of the most attractive non-binding offers. The businessman attends the auction together with Värde Partners which bought Aliseda, real estate platform of Popular. 

Soros will compete with four other teamed-up favourites at the bidding: Apollo with Centerbridge, still negotiating with Lone Star, Pimco with Marathon, Oaktree, Deutsche Bank and Finsolutia, Cerberus with Goldman Sachs and Blackstone with TPG.

Offers oscillate around €3 – €3.5 billion. The sudden interruption and appearance of the new serious bidder will raise already aggressive competition for the 100.000 mortgages included in the “Hercules Project“.

The millionaire´s decision stands in oppostition to his statements from two years ago, portending “permanent recession” for Spain and Italy. Moreover, Soros bought stakes in FCC, Bankia, Iberdrola and recently listed Hispania.

 

Original article: Expansión (by Jorge Zuloaga)

Translation: AURA REE

Lindorff Buys Santander´s Loan Portfolio From Fortress & TPG

5/06/2014 – ExpansionPro

Nearly €2 billion worth of non-performing consumer loans granted by Santander has fallen into hands of the Norwegian group. In fact, the defaulting credits lot consisted of two equal, €1 billion portfolios one put up for sale by TPG (the “Luna Project”) and the other by Fortress (the “Octavia Project”). The funds bought their parts few years ago.

This sort of sale usually involves application of an up to 98% discount.

Now Lindorff will try to improve the recovery ratio and make some profit from the acquisitions. For sure the purchase of Reintegra, collection firm of Santander at the beginning of 2013, will be of great help. Together with the company, Lindorff obtained two call centers and 700 employees in Valladolid and Madrid.

When it comes to Santander, the bank has just launched two new loan portfolios embraced in the “Yas Marina Project“. Both are worth of €300 million and contain non-performing loans, one of them gathers those lent to consumers while the other to SMEs.

Few months ago, the financial group sold €262 million in defaulting credits to Link Financial.

 

Original article: ExpansiónPro (by Jorge Zuloaga, Miércoles 4 de Junio 2014, pp.18)

Translation: AURA REE

CaixaBank, Sabadell & Kutxabank Sell Jointly €2.4 Bn in Non-Performing Loans

8/05/2014 – Expansion

Vulture funds prep for new carcass drop. Many banking entities and among them CaixaBank, Banco Sabadell and Kutxabank are giving the finishing touch to launch at least €2.4 billion in nonperforming loans.

It is expected that the three transactions will have been closed by the end of June so that the banks could add gains and cut-off default scope in their biannual balance reports.

Loan portfolios of CaixaBank, Banco Sabadell and Kutxabank contain all types of nonperfoming loans: customer lent to individuals, to SMEs (with and without collateral property) and big companies (some of them property-backed).

The three operations ought to be added to two other ongoing sales of CaixaBank and Fortress (Santander´s loans). Altogether, they amass a €4.5 billion volume of NPLs.

Once CaixaBank transferred the credits inside the “Flanders Project“, it is going to put up for sale another lot of default €1 billion. Unlike the first sale, the second called the “Valonia Project” will include €700 million in default without any guarantee and €350 million of property-backed loans. More than a half of the credits belongs to companies in bankruptcy process which suspended payments in 2009. Also, more than 50% of them are located in Andalusia (where Banca Cívica operated) and Madrid.

In turn, Sabadell that announced sale of €1 billion in NPLs in February claims that it prefers to shed them and focus on its Solvia instead of collecting the debt. Last year, the entity sold a default portfolio inside the €632 million worth “Garbi Project” to Elliot and Lindorff for €41 million.

When it comes to Kutxabank, the transaction is less complex as the bank sells only customer loans of individuals and SMEs without property as collateral. The Basque group´s lot is worth €350 million and includes 47.000 loans which have been defaulting since 2008. Nearly half of the portfolio corresponds to debtors in Andalusia (through Cajasur).

 

Original article: Expansión (by J. Zuloaga & S. Saborit)

Translation: AURA REE