Sareb Hires Goldman to Sell the Haya Portfolio: €30 Billion In Assets

30 April 2018

A change of scene is occurring in Sareb’s policies. The need to accelerate the sale of assets, together with the interest of large international funds in buying portfolios in Spain, have convinced Sareb to hire Goldman Sachs with an eye on selling its entire portfolio, currently managed by Haya Real Estate. That represents close to €30 billion of the entity’s non-performing loans, according to financial sources.

The choice of this portfolio is directly related to the date since Sareb’s contract with Cerberus’ subsidiary is the one that first that will come up for renewal, in June 2019. However, if the test that Goldman is already carrying out in the market achieves the objectives they are hoping for, Sareb could repeat the measure at a later point with the rest of the ‘servicers’: Solvia, Altamira and Servihabitat. Neither the financial institution chaired by Jaime Echegoyen nor the investment bank was willing to comment.

In its first contacts with potentially interested parties, which Goldman Sachs has already initiated, the US investment bank is offering not just the assets themselves, but also their management. This would place a potential buyer in a privileged position compared to those large funds that use servicers for their investments in Spain, such as Blackstone, Apollo and TPG. Cerberus itself, the owner of Haya, which has just acquired a portfolio of €13 billion in real estate assets from BBVA, is another example. Goldman recently notified Sareb of its confidence in being able to close the operation by next July.

Of these three investment giants, the first is the only one that lacks an asset management contract with Sareb. When the bad bank opened bidding to cede the administration of its assets, the US fund preferred to stay in the wings, as it had an interest in acquiring property as well. This desire was underlined but its recent purchase of ‘Qasar’, a portfolio of €30 billion of toxic assets from Santander-Popular.

Much as the Cantabrian bank has done, Sareb is analysing the possibility of structuring this macro-operation through the sale of a 51% stake, a percentage that would allow it to deconsolidate and reduce its gross share of the new structure to approximately €15 billion. However, the same sources point out that the final parameters of the deal are still to be defined and that Goldman is not the only institution that is working on potential deals to allow Sareb to accelerate its disinvestments.

In fact, Sareb has also employed the services of firms such as EY and CBRE within its Ebro Project, a mega-portfolio whose parameters may reach €10 billion gross in bad debts; PWC was hired for ‘Dune’, portfolio with €2.6 billion in unsecured loans; and Arcano is directing the sale of ‘Nora’, made up of €400 million in unpaid residential loans.

While waiting to see if Goldman is successful with its plans, Sareb has already begun to analyse the possibility that its next move: its next big sale of a portfolio that is currently in the hands of ‘servicers.’ Here the intention is to structure the bad loans by region, to expand the range of potentially interested buyers.

Coaxed by the need to accelerate the pace of its divestments, Sareb is rethinking its strategy of leaving the bulk of its sales to ‘servicers.’

Coaxed by the need to accelerate the rate of its divestments, considering that the bad bank was created with a life expectancy of 15 years, of which it has consumed a third, and conditioned by the consolidation process that these service companies have started, Sareb has begun to rethink if it makes sense to trust the bulk of its divestments to ‘servicers.’ It is now considering following the example of Santander and BBVA, and the bad bank is testing the waters with the mandate it granted to Goldman Sachs.

This transaction has raised questions regarding Haya Real Estate’s IPO, which was scheduled for this May and which has now been delayed until after the summer, at the earliest. Sources close to Cerberus, who have doubts about the American bank’s ability to successfully allocate a portfolio of this size in record time, left the possibility open that the IPO may be delayed until early 2019. Haya was initially valued at €1.2 billion.

Original Story: El Confidencial – Ruth Ugalde / Agustín Marco

Translation: Richard Turner