• Transaction / Assets
    Project Makalu
  • Seller
    Banco Sabadell
  • Buyer
    Deutsche Bank
  • € MM
    800-900

Sabadell Sells €9.1bn to Cerberus & €2.5bn to Deutsche Bank

19 July 2018 – Voz Pópuli

Banco Sabadell is selling its property to Cerberus and Deutsche Bank. The Catalan entity has agreed with the US fund to transfer 80% of its foreclosed assets, worth €9.1 billion for €3.9 billion. And is finalising the sale of €2.5 billion in real estate loans proceeding from CAM to Deutsche Bank, according to financial sources consulted by Vozpópuli. The entities involved all declined to comment.

The agreement with Cerberus, which this newspaper revealed, includes two of the four large portfolios for sale: “Challenger”, containing assets from the bank – around €5 billion – and “Coliseum”, containing foreclosed assets proceeding from CAM and with public aid from the Deposit Guarantee Fund (FGD).

According to a statement filed with the CNMV, Sabadell values those two portfolios at €9.1 billion and is selling them to a new company for €3.9 billion, equivalent to 42% of the initial appraisal value. Cerberus will own 80% of the new company and Sabadell the remaining 20%, in such a way that the bank will receive around €3.1 billion. The sale requires provisions of €92 million. The Solvia platform was left out of the agreement.

Agreement with Deutsche Bank

Meanwhile, the agreement with Deutsche Bank is for Project Makalu, another of the four portfolios that Sabadell put up for sale. It already sold the first, unsecured, portfolio – Project Galerna – to the fund Axactor.

Of the four portfolios, this is the largest containing loans backed by real estate collateral. And it is protected by the public aid that Sabadell received for the purchase of CAM, at the end of 2011. For that reason, this operation, which may be signed in the next few days, requires the approval of the FGD.

Deutsche Bank has fought off tough competition from Oaktree and Lone Star to acquire this portfolio. The price of the operation could reach between €800 million to €900 million, according to market valuations. The advisor on the sale has been KPMG.

The German bank is one of the typical buyers of these types of portfolio, although until now, it had not purchased anything of this magnitude in Spain. Last year, it closed two operations, one with Sareb amounting to €400 million and the other with CaixaBank amounting to €700 million.

Balance sheet

Following the imminent agreement with Deutsche Bank, the divestment team at Sabadell led by Jaume Oliu and Simon Castellá will have transferred €12.5 billion in problem assets to Cerberus, Deutsche Bank and Axactor.

This latest acquisition by Cerberus is the fourth largest in history in Spain, behind the sale of Popular’s property to Blackstone – €30 billion; the sale of BBVA’s property to Cerberus – €14 billion; and the most recent sale of CaixaBank’s property to Lone Star – €12.8 billion.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

572