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Bankia Applies 80% Discount on Developer Loan Portfolio Sold to Chenavari

10/10/2014 – Expansion

Bankia has sold a part of its real estate-backed loan portfolio to Anglo-Saxon hedge fund Chenavari. The credit package formed the part which was not transferred to Sareb (Spain’s bad bank).

Chenavari put up €79 million for the portfolio, known as Project Sky. Face value of the loans was estimated at €400 million which means that the entity applied an 80% reduction on the original appraisal prices. According to the information provided by Bankia, the sold portfolio consisted of credits of par value of €335 million. The amount shall be extended by the value of 419 collateral properties.

Great majority of the loans is non-performing with a real estate collateral, apart from being fully provisioned. In fact, the bank led by Jose Ignacio Goirigolzarri (pictured) assured that the operation allowed it to cut in defaulting loan volume by €320 million.

Not long ago, Bankia transferred another non-core portfolio called Project Amazona to Starwood and Sankaty. The €800 million worth of credits was sold for half of this amount, €400 million.


Original article: Expansión (by J. Zuloaga & R. Casado)

Translation: AURA REE