Loan Sales to Soar 70% in 2014

5/05/2014 – El Pais

According to a recent report on real estate indebtness in Europe by Cushman & Wakefield, a €30 billion worth of non-performing loans was sold during the first quarter of 2014.

The real estate advisor predicts the amount to rise to €50 billion by the end of the year that would be by 70% more than in 2013.

The big name buyers in the field were Lone Star (around €12.9 billion in total), Cerberus (€5.6 billion), CarVal Investors (€3.2 billion), Deutsche Bank (€1.7 billion) and Oaktree Capital (€1.25 billion).

“Due to considerable risk, loan sales have not been popular in Europe” says Oriol Barrachina, Partner Director of Cushman & Wakefield Spain who reminds that the debt on sale often includes quality real estate assets.

Santander has already sold its credit portfolio, while it might take about 8 years for Sareb to sell its €50 billion debt (98% is residential: 80% constitute loans and 20% assets).

Ireland and Great Britian lead in this type of sales, making 72% of all year-to-date European loan sales. Germany has been trading its loans for the past two years, the Netherlands is forging its own “bad bank”, while Italy or France have not gone for this option at all. The new requirements for working capital and solvency imposed by the ECB give the only way out: selling.

 

Original article: El País (by Susana Blázquez)

Translation: AURA REE

46