Catalunya Banc Starts Sale of €7 Billion in Delinquent Mortgages

9/04/2014 – Uci/Expansion

Entire Spain´s market preps for a large loan divestment not seen in years. In the upcoming days, Catalunya Banc will put up for an auction a loan portfolio said to be worth of €7 billion. According to sources close to the operation, N+1 that is the bank´s advisor is already giving finishing touch to the tender teaser. (…) The sale would allow the Catalonian entity clean its balance sheets up before its own auction at hand.

Along with the portfolio transfer, Catalunya Banc is negotiating the sale of its offices outside of Catalonia region with Apollo. Moreover, it shall revise its property management company sale, almost sealed with Magic Real Estate but interrupted by arrival of Blackstone. Let alone pending sale conclusion of the soured loan portfolio worth of €1.6 billion included in the ´Cava Project´.

The amount of €7 billion in mortgages represents 23% of the bank´s entire customer loan portfolio. The sale would deprive Catalunya Banc of around 40% of the total value, for which reason the asking price could rise up to €2.8 billion. However, informally the entity is receiving offers of around 30% of the value. Precisely, interested funds are ready to pay about €2.1 billion.

Several funds, like Apollo, Cerberus, Centerbridge, TPG or the Värde Partners – Kennedy Wilson consortium have already acquired several banking property platforms. Without doubt, for them the purchases were just a beginning as now they are looking for property and loans that would provide them with management leadership in the market and considerable profits. Their success strategy involves application of sigificant discounts.



Original article: Uci/Expansión

Translation: AURA REE