Bankia to Close the Sale of €1.2 Bn in Big-Volume Loans

1/10/2014 – Expansion

Bankia is putting a lot of efford into two of the biggest divestments it is obliged to carry out due to nationalization. The group chaired by Jose Ignacio Goirigolzarri (pictured) will seal deals on two huge real estate-backed loans lent to developers and hotel owners amounting to €1.2 billion in total. According to sources close to the operation, the bank may receive between five and six hundred euros for them.

In contrast to the previous transactions, these loans are not non-performing, but sub-performing and refinanced. Thanks to the sale, Bankia will reduce default rate and obtain liquidity.

On one hand, Bankia is at the verge of closing the sale of €800 million in hotel and other credits with collateral properties, grouped in the Amazonas Project. On the other hand, the entity sells a €400 million worth of developer loans inside the Sky Project. Negotiations on the latter are now well under way.

The Amazonas

The project nears to changing hands. Bankia and its advisor Deloitte have selected the bidding finalists and the following days will reveal the name of the winner. They are two: Cerberus and Starwood Capital. The sector estimates that they may pay around €400 million for the portfolio.

Last year, Cerberus, advised by Irea, bought Bankia Habitat, the real estate servicer of the entity. Moreover, the fund developes its Spanish property portfolio with such jewels as Sotogrande, real estate branch of the NH Hotel Group, for which it had paid €225 million.

If it comes to Starwood, a partner of it participates in the auction on behalf of the fund. Starwood has got wide experience in the hospitality sector. It left its own hotel business (Starwood Hotels & Resorts) in 2000.


Original article: Expansión (by J. Zuloaga & Y. Blanco)

Translation: AURA REE