CaixaBank Auctions €400 Mn Project Tower NPL Portfolio

29/10/2014 – Expansion

CaixaBank announces sale of one of the largest developer credit portfolios appearing on the market this year. Project Tower, as the operation was called, includes developer loans backed by residential housing developments, retail assets and land.

Alike other banks, CaixaBank is taking advantage of the institutional channel to step up the sales of troublesome property-linked loans.

KPMG, named to coordinate the sale, is waiting for the binding offers until November 10. The entire process is expected to close at the end of the next month.

A comparable worth of loans has been recently transferred by Bankia which obtained €80 million for its portfolio.

Project Tower consists of non-performing loans mostly on housing developments which account for 72% of the total volume. Individual homes represent further 19%, land 5% and shops 4%.

Two thirds of the delinquent credits are backed by properties found in Andalusia and the Canaries. The rest of the units are scattered around Madrid, Valencia and Barcelona.

Majority of the loans was lent by CaixaBank itself, but also a part of it proceeds from Banca Cívica, absorbed by the Catalonian entity in 2012.

Candidates for purchasing this type of portfolios are usually funds like Cerberus, Apollo, Blackstone, KKR, Soros or Chenavari as they strive at obtaining deep discounts and grabbing the real estate assets after negotiating with the debtors.

Two Thousand Flats

In case of this portfolio, the investors vie for 2.000 apartments, 1.300 garages and storage rooms, 118 shops and 128 plots.

Earlier this year, CaixaBank sold €1.8 billion in NPLs to funds: Perry Capital, Savia Asset Management and D. E. Shaw.

Last Friday, the entity’s CEO Gonzalo Gortazar said the default rate in the bank has been shrinking over the past five quarters and stood at 10.48%. Currently, it shows an amount of €21.44 billion in doubtful loans. Delinquency on developer loan still hits very high (56%).

When it comes to respossessed assets, CaixaBank holds a €6.95 billion worth of them. From January to September, the bank sold 16.367 properties for a total of €1.71 billion.


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

Translation: AURA REE