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Liberbank Sells €602M RE Portfolio To Bain & Oceanwood

23 October 2017 – Expansión

Liberbank has signed a binding agreement for the constitution of a new company together with Bain Capital Credit and Oceanwood – one of Liberbank’s current shareholders with a 12.7% stake – to which it will transfer a portfolio of real estate assets worth more than €600 million.

Specifically, the entity will transfer real estate assets with aggregate gross debt of around €602 million, of which €180 million (40%) corresponds to land and work-in-progress projects; €80 million to tertiary assets; and €342 million to residential products, according to a report submitted by Liberbank to Spain’s National Securities Market Commission (CNMV).

As a result, Liberbank will hold a 9.99% stake in this portfolio of foreclosed properties, whilst Bain Capital Credit will hold 80% of the new company, and Oceanwood will hold the remaining 10.01% stake.

Bain Capital Credit will be responsible for managing the assets in the new company following the completion of the operation, scheduled for before 31 December 2017, once the terms of the agreement have been fulfilled. According to its reports, Liberbank held sufficient provisions as at September 2017 to cover the impact resulting from the sale of this portfolio.

In this way, taking into account the direct sales of gross debt relating to real estate assets amounting to €209 million that the entity undertook during the third quarter, Liberbank has “already” fulfilled its objective of reducing its exposure to real estate assets by more than €800 million during the second half of this year, which the entity revealed when it announced its capital increase.

During this year, Liberbank plans to sell more than €510 million in non-performing assets on the retail market and, whereby, reduce its exposure by more than €1,000 million. So far this year, that figure amounts to €1,045 million, excluding the direct sales forecast for the fourth quarter.

The bank led by Manuel Menéndez decreased its portfolio of non-performing assets by 29% during H1 and by December, that decrease will have increased to 43% in two years thanks to the operation signed with Bain and Oceanwood.

Through this agreement, Liberbank expects to achieve a non-performing asset coverage ratio (NPA) of 49% (…) a Texas ratio of 94% and a CET1 (fully loaded) ratio of 12.2% as at the end of September, including the transfer of assets and the capital increase approved by the General Shareholders’ Meeting on 9 October.

€500 million capital increase

A few weeks ago, Liberbank’s shareholders approved a €500 million capital increase, which the entity will launch following the presentation of its results for the third quarter, which will take place on Tuesday 24 October (…).

Original story: Expansión

Translation: Carmel Drake