Santander & Barclays Leave San Jose in a Hurry, Selling Their Debt Share With a 50% Loss

20/08/2014 – El Confidencial

Once again banks get out of one of the few real estate giants that survived the recession hit. This time, Santander and Barclays opted for selling the loans given to Grupo San Jose for about €225 million with a more than 50% discount to Bank of America Merrill Lynch. Allegedly, a vulture fund is involved in the acquistion.

Specifically, Santander has sold €190 million in debt, while Barclays €135 million. Both banks saved small percentages of their assets, assuming the rest as a loss.

It is said that BofA Merrill Lynch sounds out other lenders of the construction company in hope of buying their part of the total of the €1.63 billion indebtness (some financial sources claim the amount reaches €2 billion).

Popular is the principal lender of San Jose, waiting for payback of €500 million, followed by Novagalicia (now Abanca) to which the group owns €400 million. Furtermore, €100 million to BBVA and less than that to CaixaBank, Banco Sabadell, Catalunya Banc, Caixa Geral, Unicaja, Eurohypo, Ceiss, Caja3 and Kutxa.

The sale of debt by Santander and Barclays does not affect the refinancing negotiations which the San Jose Group carries out with its creditors.

In the first half of 2014, San Jose earned €57 million and lost €34.07 million, which is 14.8% less than in H1 2013. The firm explains a 63.4% fall in the Ebitda with ´rental and developer price adjustment on the market´.


Original article: El Confidencial (by Eduardo Segovia)

Translation: AURA REE