Sareb Sells Off Portfolios in Struggle to Meet 2014 Targets

14/11/2014 – Expansion

The end of the year will undoubtedly be very busy for Sareb, the bad bank of Spain. The company has put up for sale at least six larg-volume loan and REO asset portfolios worth €1 billion, aiming at boosting its 2014 sales.

Sareb markets all kinds of properties and credits, ranging from office buildings in the north of Madrid, through outstanding and non-performing loans, hotel- and holiday apartment-backed credits, to subsidized housing units as loan collaterals.

Sources close to the entity explain that the portoflios are tailor-made responses to the demand and their preparation takes almost half a year. They also assure the end of the year is the perfect moment to put them up for grabs as many funds still would fancy have a Spanish real estate purchase under their belts before 2014 ends.

Additionally, Sareb is urged to improve its balance sheets in the second half of the year. In the first six months of 2014, the bad bank obtained a €429 million ebitda (up 23% year-on-year), just shy of the €1.2 billion total outcome from 2013.

Moreover, the Bank of Spain could oblige Sareb to prove its loan portfolio healthier at the end of 2014, like it did in 2013, due to new accounting changes the central bank forges for the next year.

Better pace of the huge transactions nearing their closing could help the bad bank to meet the original business plan targets and dodge underperformance this year. Also, for 2014, Sareb foresaw repayment of €3 billion owed to the State.

In such a context, the latest portfolio placed on the market was Project Olivia, including €250 million in outstanding developer loans with residential and commercial assets as collaterals.

Another sale enjoying significant interest is Project Meridian, a €130 million worth of hotel-backed credits.

Together with these two, Sareb disposes of a non-performing loan portfolio called Project Aneto, including credits tied to finished housing and land and valued at €400 million.

But not just that, Spain’s bad bank has got two ongoing operations more. Firstly, Project Agatha, encompassing €200 million in debt and over 3.000 subsidized flats. Secondly, launched in 2013 Project Corona which regained attention in the last weeks. This portfolio includes four office buildings situated in the north of Madrid.


Original article: Expansión (by Jorge Zuloaga)

Translation: AURA REE