Project Wind II: Bankia To Put €800M NPL Portfolio Up For Sale

21 March 2016 – El Confidencial

After withdrawing Project Big Bang from the market, through which it had hoped to divest the real estate assets that it did not transfer to Sareb amounting to €4,800 million, Bankia has decided to accelerate the pace of its other divestments, as it continues to analyse how to get rid of all of the property that it has on its balance sheet.

To this end, the entity chaired by José Ignacio Goirigolzarri is finalising the launch of Project Wind II, involving the sale of a portfolio of overdue mortgages. Although the details are still being finalised, the bank’s idea is to place a portfolio containing loans amounting to almost €800 million.

Last year, Bankia successfully closed Project Wind I, an operation that represented the entity’s first major sale of mortgages to investors in its history. On that occasion, the bank put loans with a value of €1,300 million on the market, divided into three sub-portfolio: more than 4,000 mortgages worth €918 million; loans to SMEs secured by RE collateral worth €180 million; and unpaid loans to SMEs worth €216 million.

Oaktree ended up acquiring the mortgages, whilst Chenavari bought the two smaller packages. For this second version, Bankia has already started to make contact with the funds, a temperature check that has awakened interest in the sector, given that it involves one of the most important portfolios forecast for this half of the year, together with Project Normadía, launched by Sabadell.

As El Confidencial revealed, the bank chaired by Josep Oliu has engaged PwC to sell its €800 million portfolio of consumer loans and credit cards, and is also analysing placing another package containing loans to property developers amounting to €1,700 million.

Appetite in the market

The funds that normally participate in these types of processes, such as TPG, Cerberus, Apollo, BofA, Goldman, Oaktree and Chenavari, are paying particular attention to the sale of these portfolios, above all, after Sareb shifted its strategy and decided to commit itself more to the retail channel.

Bankia is expected to resume Project Big Bang at some point during 2016 but, instead of forming a single portfolio, the market expects that it will divide it into several batches, given that the interested funds have already advised the bank that it is too large and diverse a portfolio to be ‘hunted down with a single shot’.

Last year, the entity carried out four major loan portfolio sales for a combined total of almost €2,800 million, which benefitted the bank’s balance sheet and allowed it to reduce its doubtful balance by more than €2,000 million.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

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