Frob to Save a Part of CatalunyaBanc´s “Hercules”

1/07/2014 – Expansion

The Fund for Orderly Banking Restructuring (or Frob by its acronym in Spanish) will buy a stake in the troublesome loans included in the “Hercules” portfolio together with international funds.

Frob distributed a blueprint contract explaining this option among the interested bidders. Precisely, it is going to create an Asset Securitization Fund (ASF) in the shape of the public aids it is obliged to grant.

Sources close to the operation say the entity will not obtain more than €3.5 billion for the €6.5 billion worth of soured loans. Apart from the direct absorption of the portfolio losses, this solution also offers tax incentives.

There are five final team-bidders for the CatalunyaBanc´s toxic credits: Soros and Värde Partners, allied Apollo, Centerbridge and Lone Star, then Pimco, Marathon, Oaktree, Deutsche Bank and Finsolutia, as well as Cerberus – Goldman Sachs team and Blackstone bidding with TPG.

The transaction includes three sub-portfolios made up of non-, sub- and completely performing mortgages. Frob assured it would prevent massive evictions once the “Hercules” changes hands.

CatalunyaBanc told the bidders the deadline for offers passes on July 10th. Possibly, the entity will run another phase in order to obtain better proposals.


Original article: Expansión (by Jorge Zuloaga)

Translation: AURA REE