29/04/2014 – Expansion
Santander is to bid for a part of impressive property-backed credit portfolio of Eurohypo in Spain. The bank chaired by Emilio Botin has already defined the part of Commerzbank´s branch to bid for. In total, Santander could vie for between 10 and 15 loans valued at between €600 and €800 million.
All these credits are outstanding and represent between 13% and 18% of all loans put up for sale. The rest of the “Octopus” portfolio will fall into hands of Apollo, Santander´s ally at the bidding.
According to sources from the financial sector, the bank has carefully chosen Eurohypo´s crown jewels, such as loans granted to Sol Meliá hotel group. These credits have got several most important hotels in the group as collaterals, two of which are found in Madrid: the Gran Meliá Fénix and the Meliá Galgos.
The rest of the loans picked by Santander are linked to property in Madrid, Barcelona and Valencia.
Sources with knowledge of the market expect Apollo to look for another partner to acquire the remaining part of Octopus worth €3.7 billion. The U.S. fund alone could pay 85%-90% of the total volume.
At the beginning of May, Santander and Apollo shall hand over their binding offer. They will fight against other fund-bank pairs: Blackstone and Deutsche Bank, Lone Star and JPMorgan and Cerberus with Credit Suisse or Bank of America. What is more, several funds will bid for a piece of the portfolio: Goldman Sachs, Värde Partners and Orion Capital.
Along with the loans lent to Sol Meliá, the auction includes debt of Bami, Testa and Inmobiliaria Chamartín. Furthermore, it contains large shopping malls, like Zielo de Pozuelo and H2O in Madrid, and hotels like the Ritz.
Original article: Expansión (by Jorge Zuloaga)
Translation: AURA REE