Five Funds Buy Debt of the Landlord of Santander

9/07/2014 – Expansion

At least five opportunistic funds bid for the seat of the next landlord of Banco Santander. Värde Partners, GSO (a fund of Blackstone), Centerbridge, Canyon and Monar have purchased around one forth of the €1.9 billion debt of Propinvest, borrowed for buying the “Ciudad Financiera de Santander”, the bank´s headquarters in Boadilla del Monte (Madrid). The present landlord voluntarily filed for the insolvency process.

Its main lenders were Royal Bank of Scotland (RBS), as well as CaixaBank, Deutsche Postbank, ING, Bayerische Landesbank, HSH Nordbank and Raiffeisen which lent €1.575 billion. Some of them decided to leave before the arrangements and sold the debt to these funds.

According to sources with knowledge of the operation, the convention between Propinvest and the creditors might not be drawn before 2015. One of the solutions is the sale of the “Financial City”.

Santander holds a pre-emptive right in such case, therefore the bank may recover the ownership of the property with a discount. Also, a proposal by the lenders to swap the debt for assets, converting them into new landlords of Santander is not ruled out.

The entity pays at least a €82 million rent each year, as per the latest accounts facilitated by Marme Inversiones 2007, a Spanish arm of Propinvest. The “Ciudad Financiera” spreads over 160 hectares with Santander´s headquarters taking over 400.000 constructed square meters, including a hotel accommodation, an information center, a kindergarden, sports facilities and a golf course. The sale-and-leaseback agreement was signed in 2008 for the next 40 years.

Apart from the vulture funds, also Robert Tchenguiz and Abu Dhabi fund Aabar Investments take part in the bidding.


Original article: Expansión (by Jorge Zuloaga)

Translation: AURA REE