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Popular Sells 2 Doubtful Debt Portfolios To Apollo & Blackstone

13 January 2017 – Expansión

Banco Popular has sold two debt portfolios to the funds Apollo and Blackstone for the combined amount for more than €620 million, according to sources close to the operation.

Specifically, the entity has sold one €220 million debt portfolio, secured by hotel assets, to the Apollo group; and another to Blackstone, for more than €400 million, secured by property developments, primarily in the residential sector, containing more than 750 homes and a similar number of parking spaces and storerooms.

Although the portfolio sales is one of the sales channels established by the bank for the divestment of non-productive assets, it is the first time that Popular has sold any doubtful portfolios, which demonstrates a change in its strategy towards the management of non-productive assets, besides the traditional route of repossession and subsequent sale of the collateral, which has been applied in most cases to date.

The portfolios sold have been grouped into homogenous assets to simplify their analysis and optimise their price. The sales have been conducted at coverage levels in line with the objectives of Popular’s Business Plan.

In addition, another €100 million of refinanced assets under special surveillance have been sold with the aim of reducing the risk profile of the portfolio and freeing up capital.

During the first nine months of 2016, Popular maintained a steady pace of property sales, amounting to €1,554 million in total.

In its Business Plan for 2016-2018, Popular has set itself the target of reducing its non-productive assets by 45%. Specifically, the bank is aiming to reduce its non-productive asset balance by €15,000 million by 2018, placing its strategic focus on maximising the value of those assets.

Original story: Expansión

Translation: Carmel Drake