Sareb auctions its first great lot of toxic assets between Lone Star, Centerbridge and TPG.

On the next 18th July, Sareb will award the sale of the first great lot of toxic assets to an international investment fund. Two weeks ago, those interested in participating in the Operation Bull, code name for this process, presented their binding offers, as confirmed by financial sources. In total, the bad bank has received  proposals from the giants Lone Star, Centerbridge and Texas Pacific Group (TPG), although there are other firms such as Cerberus and Colony Capital.

Everyone in the market considers that Lone Star is the favorite candidate to win the bid for several reasons. The main one is its capacity to present the tightest price, as it knows better than anyone the profile of the assets on sale, as it studied its acquisition from Bankia before they were transferred to Sareb.  Since then, it has monitored their evolution within the bad bank, being even ready to propose their acquisition without a competitive process, as finally decided by the team lead by Belén Romana.

Precisely this decision has complicated the execution of the Operation Bull. The election of KPMG to carry out a competitive process generated a lot of noise among the six international investors that hope to split up the main lots of assets that Sareb will sell. In the end, the same funds that studied the possibility of participating in the capital of the bad bank-Fortress, GE Capital- are the ones that will now buy the properties directly, without entering the strict shareholding structure imposed by the Banking Restructuring Fund.

Any result other than the victory of Lone Star would be a surprise. As explained by one of its rivals, the Texan firm – with headquarters in Dallas, has hired the main real estate consulting firms in the market – Knight Frank, Aguirre Newman and Jones Lang LaSalle, except CB Richard Ellis, in conflict after advising Sareb – to study its offer and, at the same time, to stay out of the reach of its rivals. Also, it is the investor that has spent more resources in audit and viability processes in order to classify the assets on sale.

Something similar happened with the sale of assets carried out by the Municipal Company of Housing and Land (MCHL) of the Council of Madrid, although in the end the buyer has been a different one. Before opening the bidding process, the municipal company negotiated individually with Lone Star in order to model a portfolio that fits its preferences. Once this phase was completed, however, the MCHL carried out a bidding process attended by most of the funds installed in Spain that hope to have a piece of the confiscation process that is taking place there.

While the date for the decision approaches, all investment funds specialized in the acquisition of toxic assets, those who are participating and those who are not, work hoping to be able to bid for the portfolios of properties (Bull 2, Bull 2…) that Sareb is carrying out. This calendar, however, depends on the working rhythm needed by the bad bank to complete the audit of the 180.000 real estate assets, from land to unfinished developments, which are part of its stock. This should theoretically be ready in August.

After this date Sareb will start the sale of its great portfolios of properties, with the intention of reaching the 1500 million Euros included in their business plan for this year. The team of the bad bank, which works at a frantic pace to comply with the requirements established by Brussels, is not too happy with the complaints on their work. (…)

Source: El Confidencial