29 June 2018 – Voz Pópuli
Sabadell has already completed the first phase of its investment plan. The bank chaired by Josep Oliú has agreed to sell a portfolio of non-performing loans amounting to €900 million to the Norwegian fund Axactor, according to sources at the funds involved in the process consulted by Vozpópuli.
The portfolio known as Project Galerna comprises mainly mortgage tails proceeding from CAM, which form part of the entity’s Asset Protection Scheme (EPA), and so the completion of the operation is conditional upon approval from the Deposit Guarantee Fund (FGD).
Loans that remain after the foreclosure of real estate credits are known as the mortgage tails. According to the sources consulted, the purchase of these types of assets – which tend to be fully provisioned (100%) by the entities, and so typically generate gains – tend to have discounts of between 95% and 97%, and so the offer from the Norwegian fund to acquire this portfolio could amount to between €25 million and €47 million.
In the bid to be awarded this unsecured portfolio, Axactor has fought off competition from other interested parties such as Lindorff and Kurk. The Norwegian fund arrived in Spain in 2015 and, at the end of 2017, purchased a portfolio of non-performing loans amounting to €436 million from Bankinter.
The award of Project Galerna to Axactor, a process that KPMG is advising, represents the first step in Sabadell’s divestment plan, through which it is seeking to get rid of around €10.9 billion in non-performing assets before the summer.
As this newspaper already revealed, in addition to Galerna, the bank also has projects Challenger and Coliseum up for sale, operations that Alantra is advising, and which together contain €7.5 billion in foreclosed assets. Similarly, Project Makalu, which KPMG is advising, contains €2.5 billion in loans to property developers and SMEs.
Challenger is the only one of the four portfolios that is not subject to approval from the FGD. The other three are linked to CAM’s EPA and so their block sale would generate million-euro losses for the FGD, which will end up increasing its deficit.
Negotiations with the FGD
To avoid that, Sabadell – as well as BBVA – is negotiating with the FGD to transfer the portfolios to new companies created by the entity and the funds that they are awarded to. In this way, the losses would not be assumed until the new companies sell the assets in the market.
In order to offset these losses, Sabadell, as well as BBVA with respect to Unnim’s EPA, has offered the Deposit Guarantee Fund the option of assuming more than 20% of the losses of the EPAs.
Original story: Voz Pópuli (by Pepe Bravo)
Translation: Carmel Drake