Morgan Stanley Lends Cerberus €3bn to Purchase BBVA’s RE

1 December 2017 – Voz Pópuli

Of the cheque for €4 billion that BBVA is going to receive for the sale of its foreclosed real estate, €3 billion will be coming from Morgan Stanley’s coffers. The US investment bank has been awarded the mandate to finance Cerberus’s operation, whereby fighting off competition from other international and Spanish entities, according to financial sources consulted by Vozpópuli.

Unlike in the case of Blackstone and Popular-Santander, Cerberus has decided to close its financing arrangements in advance, even though the small print of the agreement will still take a few months to negotiate.

As this newspaper revealed, BBVA has agreed to sell all of its foreclosed assets to the US fund in an operation worth €5 billion. A new company will be created to which assets worth €13 billion and the Anida platform with its 450 employees will be transferred, with the option of also moving another 150 employees from the bank. And Cerberus will buy an 80% stake in this company for around €4 billion.

The figures may still vary slightly over the next few months, given that both BBVA and the fund have to review which assets have exited the portfolio in recent months because they have been sold (through the network).

The start

The operation, known as Project Marina, was launched at the beginning of June and is expected to be closed with a discount of approximately 61%, which is lower than the 67% that Santander obtained from its sale of Popular’s real estate.

That sale – Project Quasar – is also pending completion, expected during the first quarter of 2018.

After removing €13 billion in foreclosed assets from its balance sheet, BBVA will put one or more property developer loan portfolios on the market over the next year or so, as it continues to accelerate the digestion of its property assets. Those portfolios will be similar in size to Project Jaipur (€0.6 billion), which was also awarded to Cerberus.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake