Sabadell Delays Completion of ‘Solvia Desarrollos Inmobiliarios’ Sale until May

28 February 2019 – El Confidencial

Banco Sabadell is finalising the sale of land from Solvia Desarrollos Inmobiliarios (SDIn) to complete its real estate divestment process with prices of between €900 million and €1.1 billion. The process began with more than 20 funds and property developers expressing interest. Analysts forecast that the Catalan entity will record gains of more than €200 million.

To this end, the bank chaired by Josep Oliu (pictured above, left), has already prepared a timetable. The entity has delayed the deadlines because it has taken longer than expected to receive some of the signed confidentiality agreements (NDAs). Now, the interested parties will have until 30 March to analyse SDIn and submit non-binding offers. The deadline for the subsequent period for the submission of binding offers will be 17 May.

In this way, Sabadell will have the second half of May to accept the winning bid, and then receive the corresponding authorisations to complete the divestment before July (…).

Analysts expect that the operation will be executed in the region of €1 billion, with a discount of 30% on the net asset value. Even so, that would result in capital gains from profits of more than €200 million, according to a report by Alantra, to which this newspaper has had access. In this way, the maximum quality capital ratio (CET1 fully loaded) would move towards 12%, approaching the 12.5% that the bank has set itself as a target for 2020 in its strategic plan. In December, the ratio amounted to 11.1%, well below the 12.8% from the previous year following the sale of toxic property and the problems with the integration with TSB.

The land has been valued at €1.3 billion by Savills Aguirre Newman and by the property developer SDIn itself (…).

Candidates include funds and property developers. Market sources point to Cerberus, Oaktree and Neinor homes as some of the leading contenders. The operation will require the buyer to become one of the largest real estate players in Spain (…).

In December, Banco Sabadell agreed the sale of its property developer Solvia to the Nordic fund Intrum for €300 million. Intrum is listed on the Stockholm stock exchange and is the owner of Lindorff and Aktua in Spain (…).

Original story: El Confidencial (by Óscar Giménez)

Translation: Carmel Drake

Sareb Considers Slicing Up Haya Real Estate’s €24bn Mega-Contract

27 March 2018 – Voz Pópuli

Sareb is already working on a new tender for its largest management contract. Specifically, it involves old real estate loans from Bankia worth €24 billion that are currently being administered by Haya Real Estate, the real estate arm of Cerberus. The contract is due to terminate at the end of 2019, but Sareb is already working on different options to launch a tender in the short-term and for the portfolio to be awarded in just over a year.

One of the options on the table involves slicing up the contract into two or more mandates, according to confirmation provided by Sareb to this newspaper.

There are several options under consideration at the moment. The first, placing the €24 billion (in gross terms, the figure amounts to €13 billion in net terms) servicing contract, as it stands today, with a single manager, which could be Haya Real Estate or could be one of its large competitors, such as Altamira, Aktua, Servihabitat, Solvia or Aliseda-Anticipa (Blackstone).

That scenario is the one that most interests Haya Real Estate, which has a lot at stake with this contract, given that it represents 60% of its assets under management, and the firm is in the midst of its stock market debut. It is interested because Cerberus’s platform is the one that knows the assets the best and has the advantage of not having to migrate them, which would slow down Sareb’s rate of sales.

Other options

Alternatively, the mega-contract could be shared out between several platforms. One of the options under consideration is to tender a contract linked to the ownership of the assets. In other words, a large operation like those that Santander and BBVA starred in last year with Blackstone – Project Quasar – and Cerberus – Project Marina -, respectively.

That would also involve the creation of a joint venture company, like the FAB. In this way, Sareb would kill two birds with one stone: deconsolidate assets without forgoing potential gains; and award the management of the assets to a fund-platform.

Another option on the table is to split Haya’s portfolio into two or more batches. That split could be performed by type of asset, linked to the debt (tertiary, residential, land…), or by geographical area, whereby benefitting from the specialisation of the platforms.

The first contract to be renewed is Haya Real Estate’s. The other three are not due to terminate until 2021: Altamira’s with 28,000 properties from the portfolios of Catalunya Banc, Caja 3 and BMN; Solvia’s with 34,000 properties proceeding from Bankia; and Servihabitat’s, with properties and loans from NCG, Liberbank and Banco de Valencia.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Cerberus Wins Bid To Manage & Sell Bankia’s Expanded Real Estate Portfolio

5 March 2018 – La Información

Cerberus has fought off competition from Lindorff to become one of the new Bankia’s partners, responsible for managing and selling its portfolio of foreclosed assets, which now exceeds €5 billion. The group chaired by José Ignacio Goirigolzarri has opted to continue with its existing partner in the end, to the detriment of the partner that has been working with BMN since 2014, for reasons that may go beyond the mere economic bid offered by both, indicate reliable sources.

Bankia’s alliance with Cerberus dates back to 2013, when it acquired its real estate firm Habitat on which it built Haya Real Estate, the servicer, which is now finalising its debut on the stock market after having also been awarded contracts to manage the portfolios of BBVA, Liberbank, Cajamar and Sareb (…).

At that time, almost all of Spain’s financial institutions opted to divest their “servicers” in light of the need to accelerate the sale of their toxic assets and the large appetite of specialist funds to grow in size and contracts. BMN’s story is similar. In 2014, it sold its real estate asset company Inmare to Aktua for €40 million. Aktua was Banesto’s former real estate servicer company, which Lindorff acquired from Centerbridge Partners in a close battle with Apollo and Activum SG Capital Management in 2016.

The Norwegian fund, which is itself currently immersed in an integration process with Intrum Justitia, thus took over the management of the real estate assets of the banking group led by Caja Murcia, as well as of those transferred by BMN to Sareb. The entity now also works for Ibercaja and with certain portfolios from entities such as Santander.

Haya Real Estate and Lindorff’s contracts with their respective clients are similar because they both impose a decade-long period of exclusivity, forcing Bankia to review its position following the absorption of BMN, just like with other types of joint ventures. The bank is going to proceed first to break the contracts and indemnify each partner for a sum estimated to amount to €100 million, according to Expansión, and then it plans to close a new agreement with the winning party. Both partners may have submitted similar bids although it is understood that Aktua offered an exclusively commercial service whilst the agreement with Haya Real Estate included the absorption of the workforce.

The transfer of employees

The new Bankia Group’s property portfolio has a gross value of €5.1 billion, as at the end of 2017, compared with €3.5 billion registered a year earlier excluding BMN’s exposure. The entity has a cushion of provisions that covers 35.9% of its portfolio value in such a way that it could afford to dispose of the portfolio at 64.1% of its initial value without incurring losses. The bulk – 62% – are homes associated with foreclosed mortgages and another 16% are properties received for debt in construction or property development – 48% of that proportion corresponds to land -.

BFA’s subsidiary reduced its problematic assets by 9.9% YoY last year – excluding the incorporation of BMN’s exposure onto its balance sheet – thanks, above all, to sales amounting to €427 million (€5.55 million corresponded to gains) and a 15.3% reduction in doubtful risks.

With the integration of BMN, the bank is being forced to review and rethink all of the contracts where exclusive suppliers operate in both networks. It has already resolved one relating to life insurance, which will see it discontinue BMN’s relationship with Aviva – it will pay that firm €225 million by way of compensation – in favour of Mapfre, which was also victorious in 2016 when the bank came across another duplicate alliance, for the first time (with the same British insurance company, which was also a historical ally of Bancaja). It still needs to settle a similar agreement with Caser, and put the finishing touches to its deals with Lindorff and Cerberus.

Original story: La Información (by Eva Contreras)

Translation: Carmel Drake

Cerberus & Lindorff Compete for Bankia-BMN’s RE Business

14 February 2018 – Real Estate Press

Bankia has started talks with Haya Real Estate (Cerberus) and Aktua (Lindorff) to award the management of all of the real estate assets that it has incorporated into its portfolio following its merger with BMN (…), according to sources in the know. Bankia has been working with Haya since 2013 and BMN with Aktua, the former real estate arm of Banesto, since 2014.

The same financial sources indicate that Bankia is now in a stronger position to improve the conditions of its contract in light of the good times being enjoyed in the real estate sector. Although the technological integration of the two entities will not take place until 19 March, the authorities already approved the merger at the end of December.

In 2013, the entity chaired by José Ignacio Goirigolzarri awarded the business to manage and sell around €12.2 billion gross in real estate assets to Cerberus. That agreement comes to an end at the beginning of 2023. Haya Real Estate, the Spanish subsidiary of the US fund Cerberus, has become a major player in the real estate market in recent years. It manages debt and assets worth almost €40 billion and has engaged Rothschild to handle its upcoming stock market debut later this year. It also holds agreements with Sareb, BBVA, Cajamar and Liberbank.

In its failed attempt to go public, BMN got rid of its property manager Inmare in 2014 to focus on the traditional business. It then signed a 10-year agreement with Aktua.

Subsequently, the Norwegian fund Lindorff purchased Aktua in 2016. That company also manages the real estate assets of Ibercaja, amongst other entities.

Cerberus and Lindorff are re-enacting the battle fought last summer. Then, the funds were bidding to acquire the real estate subsidiary of Liberbank, Mihabitans. In the end, the US won those negotiations and was awarded the contract to manage Liberbank’s foreclosed assets for the next seven years.

Original story: Real Estate Press

Translation: Carmel Drake

Haya Signs Agreement with ING to Manage its Foreclosed RE Assets

28 December 2017 – Voz Pópuli

Haya Real Estate is continuing to expand its real estate network in Spain. In just two months, Cerberus, the owner of the platform, has purchased 80% of BBVA’s real estate, acquired the property developer Inmoglacier and signed a new alliance with a bank: ING.

This latest agreement was signed in November and establishes that, from now on, Haya RE will be responsible for the management and sale of ING’s foreclosed assets, including not only those properties the bank already controls but also those that it inherits in the future due to defaulted loans. Although the real estate exposure of the Dutch institution in Spain is low (no figures were revealed), the deal shows that Haya Real Estate is continuing to win clients in a highly competitive market.

Cerberus España already controls the assets of BBVA (once Project Marina is approved in the middle of the year), Sareb, Bankia, Liberbank, Cajamar and those of other funds such as Waterfall. In total, it has property worth more than €50 billion under its management.

Another contract won by Haya recently was Waterfall’s, comprising 400 assets worth €57 million, purchased from Cajamar. That agreement made amends for the fact that Altamira won the contract to manage the assets of Liberbank that were acquired by Bain Capital.

Mergers

All of the real estate platforms (also known as servicers) are trying to win business ahead of a possible consolidation in their market in 2018. Haya Real Estate, Servihabitat (in which TPG and CaixaBank hold 51% and 49% stakes, respectively), Altamira (owned by Apollo 85% and Santander 15%), Aktua (Lindorff) and Anticipa-Aliseda (Blackstone) are the largest.

Another recent move in the sector saw the entry of Axactor, with the acquisition of Unicaja’s assets.

Solvia, the real estate arm of Sabadell, is one of the major unknowns in the sector. Two years ago, it negotiated a possible merger with Haya Real Estate, which has still not been ruled out as we head into 2018.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

 

Cerberus Gets its Cheque Book out again to Buy NPLs from CaixaBank

4 December 2017 – Voz Pópuli

Cerberus is stepping on the accelerator in Spain. The US fund has starred in another major operation just days after acquiring a real estate portfolio from BBVA. One of Cerberus’s subsidiaries, Gescobro, has won an auction for €0.8 billion in non-performing loans and real estate from CaixaBank.

The fund has purchased part of that portfolio, known as Project Egeo, whilst the Norwegian group Lindorff has bought the rest, according to financial sources consulted by this newspaper.

Part (€0.5 billion – €0.6 billion) of this €0.8 billion portfolio comprises unsecured loans (credit cards, personal loans and others without any guarantee) and just over €0.2 billion relates to loans to SMEs secured by real estate.

This is Cerberus’s fourth operation in the Spanish financial and real estate sector in 2017 following the acquisition of Project Jaipur from BBVA (€0.6 billion in non-performing property developer loans; the purchase of the real estate arm of Liberbank, Mihabitans, for €85 million; and the acquisition of €13 billion in property from BBVA for €4 billion.

Strategic fit

The sale of Project Egeo, which is still pending the completion of the necessary paperwork, forms part of the routine divestment plans of the Catalan group. In this way, it is managing and controlling its default rate and complying with the regulatory requirements of the European Central Bank (ECB).

Currently, the group’s default rate stands at 6.4%, after falling by seven tenths in the last year. In total, its doubtful loans amount to €15.3 billion, of which €13.9 billion are in Spain. It has another €7.2 billion in foreclosed assets.

The firm that has won the auction, Gescobro, has been led by Iheb Nafaa until now, but he was recently poached by Servihabitat, the real estate company owned by TPG (51%) and CaixaBank (49%).

Meanwhile, Lindorff has been one of the main competitors in the bank debt market since 2012. More than a year ago, it expanded its real estate business with the purchase of Aktua, the former real estate arm of Banesto; and it strengthened its business through a merger with Intrum Justicia.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Bankia Considers Rapid Sale Of BMN’s Property Portfolio

13 October 2017 – Cinco Días

Bankia is currently considering how it will deal with the exposure to real estate through BMN that it will end up with following the planned integration of the two entities at the beginning of 2018. The bank chaired by José Ignacio Goirigolzarri is considering the rapid sale of BMN’s problem assets to one of the opportunistic funds that typically participate in these types of operations.

Goirigolzarri’s entity has already made contact with several of the intermediaries that typically advise on these types of transaction, according to sources familiar with Bankia’s intentions, to sound out the options available. These intermediaries include large consultancy firms and several investment banks. The bank has reportedly asked all of these companies to share their ideas about how to best handle a potential sale.

Bankia’s initial idea involves carrying out a rapid operation, similar to the deal undertaken by Santander in August, with the sale of the portfolio that it inherited from Popular that it transferred to the fund Blackstone in just six weeks. That agile move was very well received by the market.

Unlike in the case of Popular, BMN’s exposure to property is considerably less. The entity owns around €1,100 million in net foreclosed assets, according to data about the merger of both entities reported by Bankia in June. The entity has a coverage ratio of 28% over its foreclosed assets and 40% in the case of its doubtful debts (somewhat lower than the average for the sector, which stands at around 50%).

Moreover, of the total net foreclosed assets, 64.4% correspond to finished homes and 19.1% relate to land. In terms of the entity’s total loan book, which amounts to €21,900 million, only 2.7% relates to property developer loans.

The merger of Bankia and BMN was approved by the General Shareholders’ Meetings of both entities in September. The authorities are expected to declare their approval of the union in December and the definitive integration is forecast to take place at the beginning of 2018. The operation will be articulated through the handover of 205.6 million newly issued shares in Bankia to the shareholders of BMN, which effectively means assigning a value of €825 million to the latter (0.41 times its book value).

As such, BMN’s shareholders will hold 6.7% of Bankia’s share capital. Following the merger, Bankia will be the fourth largest entity in the country, behind Santander, BBVA and Caixabank (…).

Another of the differences compared to the operation involving Popular is that BMN does not have its own servicer. In the case of the bank acquired by Santander, it repurchased the 51% stake in Aliseda that was held by the funds Värde Partners and Kennedy Wilson, to subsequently include it in the operation that was then sealed with Blackstone.

In 2014, BMN sold its real estate asset management company Inmare to the servicer Aktua (controlled by the Norwegian fund Lindorff), to become strategic partners in the management of those assets.

The most likely scenario is that Bankia will execute the sale of the assets proceeding from BMN as the single transfer of a portfolio, given that it no longer owns a servicer. The entity chaired by Goirigolzarri declined to comment on any possible operation given that the merger has not yet been approved by the authorities (…).

The potential buyers will presumably include the usual suspects, such as Apollo, Oaktree, Bain, Cerberus, Blackstone, Lone Star, Castlelake, Värde Partners, Lindorff, TPG and Goldman Sachs.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

KKR & Cabot Compete To Acquire Hipoges

31 August 2017 – Voz Pópuli

KKR and Cabot Financial are competing in one of the processes that has generated the most excitement amongst overseas funds in recent months. The two Anglo-Saxon investors are the finalists in the bid to acquire Hipoges, a platform created at the end of 2008 by former directors of Lehman Brothers, the investment bank that went bankrupt in September of that year.

The platform is controlled by Cerberus, with a 40% stake, and by its CEO, Juan Francisco Vizcaíno, who owns 18.3%. It is not clear how much of the company is up for sale, although the various sources consulted by this newspaper explained that the initiative to launch the sales process has been taken by the directors. The final price of the transaction could amount to €25 million.

The bid is being led by Alantra as an advisor and funds such as Bain Capital have participated in it, in addition to Cabot and KKR.

Hipoges has a presence in four countries, although most of its business is concentrated in Spain. In total, it administers almost €8,000 million for 22 clients, above all overseas opportunistic funds and financial institutions.

Intense competition

The platform advises investors regarding the acquisition of portfolios and the subsequent management of the assets acquired. Hipoges is responsible for administrating debt, filing claims to recover it, going to court and in the event that a property is repossessed, managing and selling it. It also competes with the major real estate companies, such as Haya Real Estate, Altamira, Servihabitat, Aktua, Aliseda, Solvia and with other independent firms such as TDX, Finsolutia and Copernicus.

Of the €8,000 million that it administers, 72% are unpaid loans granted to property developers and mortgages. The remainder are loans to SMEs (14%), consumers (12%) and invoices (2%).

By entering this process, KKR wants to take another step forward in its real estate strategy in Spain. After purchasing a portfolio of mortgages from Abanca – formerly NCG Banco – the North American fund is negotiating the acquisition of a platform that will allow it to continue gaining experience in the property sector.

Meanwhile, Cabot is another of the foreign groups that is most committed to the purchase of banking assets. It arrived in Spain in 2015 with the acquisition of Gesif and is hoping to enter the real estate business with Hipoges.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Liberbank Accelerates Sale Of Its RE Arm For €80M

20 July 2017 – Voz Pópuli

A defensive operation by Liberbank. The Asturian entity is accelerating the sale of its real estate company Mihabitans to strengthen its capital, according to financial sources consulted by Vozpópuli. The group led by Manuel Menéndez (pictured above), which declined to make comments, had been considering this possibility for months but has decided to fire the starting gun now, when the market’s focus has been placed on the entity. The prices being considered for this sale come in at just over €80 million.

The operation has been underway for several months under the watch of Alantra (formerly N+1). The subsidiary up for sale is Mihabitans Cartera, which Liberbank created in June last year. This company is responsible for managing the financial group’s homes and real estate debt. Liberbank has transferred some of its staff to the new entity. Its CEO is Víctor Sánchez, the Director that Menéndez entrusted to sort out the property portfolio at CCM following its purchase.

This sale, known in the market as Project Pipe, includes only the management of the real estate assets, a priori, and not their ownership. The idea is that it will take a similar form to the operation carried out by Santander with Altamira when Apollo purchased an 85% stake of that entity; as well as CaixaBank with Servihabitat, which is now controlled by TPG; and Popular with Aliseda.

According to the same sources, the process is in an advanced phase and several candidates have been selected to submit binding offers. The candidates include Lindorff, owner of Aktua; and Haya Real Estate, owned by Cerberus.

Crucial moment

These types of operations are undertaken to generate capital gains and strengthen capital. Given that they only manage properties, companies such as Mihabitans do not have any assets of their own other than their employees and the contract with the bank(s) that own(s) the properties. Depending on the contract agreed, the price may be higher or lower. In this way, Popular obtained around €700 million for Aliseda and Santander received €664 million for Altamira.

This sale comes at a key moment for Liberbank. Following the termination of CCM’s asset protection scheme (EPA), the group’s default rate soared in the last quarter and its capital decreased to 12%, above the levels required. Nevertheless, it is considering several options, such as the deal involving Mihabitans to strengthen itself and calm the market (…).

Liberbank has been compared to the entity that is now in the hands of Santander (Popular) in terms of its default rate, which in the case of the former amounted to 13% at the end of March. The objective is to bring it down below 7% within a year and a half. The entity had accumulated €2,951 million in doubtful debt and €2,414 million in foreclosed assets as at March, with a coverage (over the latter) of 40%. The sale of homes, which Mihabitans is responsible for, reached historical highs in the first quarter of €56 million (…).

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

ECI Accelerates Sale Of 140,000 Doubtful Loans

10 April 2017 – Voz Populí

Financiera El Corte Inglés has selected three overseas funds as candidates to go through to the final round of its tender to award the first sale of doubtful loans in its history. The entity that is jointly owned by Banco Santander (51%) and El Corte Inglés (49%) has chosen Axactor, Cabot Financial and Link Finanzas as the finalists in Project Alexandria.

Through this process, Financiera El Corte Inglés wants to clean up the worst part of its credit portfolio, by selling off loans that it deems irrecoverable. Project Alexandria comprises 140,000 doubtful credits, mainly corresponding to loans worth €160 million.

This operation is generating a great deal of interest in the market, because to date, El Corte Inglés and its financing arm have not put any portfolios on the market. For this reason, the funds are all willing to pay a premium in order to begin to collaborate with the largest consumer finance company by volume of loans.

The three funds selected to participate in the final phase of the process are investors that have been operating in Spain for a while. They all have their own recovery platforms and they have a vested interest in making a name for themselves in this market.

Who are the candidates?

Axactor arrived in Spain two years go. It is a Nordic group founded by former directors of Lindorff, one of the largest platforms in this segment in Europe, which in Spain controls Aktua and provides services to Sabadell and BMN. Like its fellow group from Norway, Axactor arrived in Spain chequebook in hand and within a few months had purchased several portfolios plus the business and team at Geslico, the former subsidiary of Lico Leasing.

Cabot is also an international recovery platform, based in the United Kingdom, and with connections to Encore, one of the largest global groups, itself based in the United States. Cabot established itself in Spain a couple of years ago and made its break with the acquisition of one of the largest servicers, Gesif.

Meanwhile, Link Finanzas is another British fund whose interest in Spain dates back even earlier than those of the other two investors. Link has been purchasing portfolios in the Iberian market for years. Last year, it consolidated its international presence with the purchase of the last vestiges of BBVA’s consumer business in Italy, for €100 million.

One of these three investors will be awarded the first portfolio to bear the El Corte Inglés brand. They are expected to submit their binding offers, which could amount to €15 million – €20 million, after Easter.

The latest data from Asnet and the CNMV reveal that Financiera El Corte Inglés is one of the market leaders by market share and profit, given that in 2016, it earned more than €66 million. Besides this portfolio, there are currently more than a dozen portfolios in the market, from the main entities in the country, including: BBVA, CaixaBank, Bankia, Liberbank, Ibercaja and Popular, amongst others.

Original story: Voz Populí (by Jorge Zuloaga)

Translation: Carmel Drake