Santander Matches the Reuben Brothers’ Bid to Acquire the Ciudad Financiera

13 February 2019 – Voz Pópuli

Santander has matched the bid presented by the Reuben brothers for the Ciudad Financiera, in a new attempt to neutralise the offensive by the British investors to acquire its headquarters in Boadilla del Monte (Madrid).

On Tuesday, the bank chaired by Ana Botín presented a preferential acquisition right against the bankruptcy of Marme – the previous owner of the Ciudad Financiera –in the commercial court of Madrid, having set aside €20 million to be able to carry out the acquisition, according to sources familiar with the process. The operation is valued at around €3 billion.

Spain’s largest bank considers that it has the option of resorting to a preferential acquisition right, established in the lease contract for the Ciudad Financiera, signed on 30 December 2008 between Marme and Santander Global Facilities.

Bankruptcy process

Nevertheless, during the bankruptcy process that has resulted in the sale of the Ciudad Financiera, the administration appointed by the judge warned that the aforementioned right could not be exercised in order to “not obstruct the liquidation of the assets any further”.

Judge María Teresa Vázquez Pizarro, from Commercial Court number 9 in Madrid, said that the purpose pursued with the transfer of the Ciudad Financiera determines “that the lessee’s right of preferential acquisition cannot be accepted, given that the interest in the continuity of the business activity prevails over any rights recognised to third parties”.

The deadline for Santander to exercise its preferential acquisition right expires in the middle of this month (…).

Last November, the bankruptcy administration announced that the Reuben brothers had submitted the highest bid for the Ciudad Financiera, exceeding even the offer presented by Santander, a decision ratified this year by the court.

Santander warned that the offer from the British investors – one of the top 100 wealthiest families in the world – should not be accepted, highlighting the corporate network that they had set up for the operation, which includes several companies registered in tax havens.

Moreover, the Spanish bank has agreed the purchase with the main creditor banks of Marme – Caixabank, ING, Natwest Markets (previously The Royal Bank of Scotland), Bayerische Landesbank, and HSH Nordbank- of their debt. Through that, it has managed to obtain the support of those entities for its intentions and they have sent letters to the mercantile court defending the purchase of the Ciudad Financiera by Santander.

The breach of the preferential acquisition right by Marme carries a fine of €500 million, and the retraction of the sale to a third party, according to the terms of the contract signed by Marme and Santander, say the sources consulted.

The same sources indicate that this fine could be supplemented by another penalty amounting to €750 million if the suitability test is not fulfilled; in total, a fine amounting to €1.25 billion that Santander hopes will serve to ensure that the Reuben brothers reconsider their strategy

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

The Reuben Brothers Complete the Purchase of Santander’s HQ for €283M

14 January 2019 – El Periódico

Commercial Court number 9 in Madrid has decided that the best offer for the acquisition of Santander’s Ciudad Financiera, is the one presented by the brothers Simon and David Reuben through their investment arm in Spain, Sorlinda Investment, which bid a fixed amount of €283.73 million.

The administration responsible for the liquidation procedure of the company Marme Inversiones 2007, which is the owner of the Cantabrian bank’s headquarters, asked the Commercial Court to declare the offer presented by Sorlinda Investment as the winner after concluding that its bid was the best. In 2014, Marme Inversiones filed for creditors’ bankruptcy in light of its inability to repay the €1.575 billion loan that it had used to purchase the property from Banco Santander itself.

A few months ago, Banco Santander filed a series of allegations when it was announced that Sorlinda had won the bid. It questioned the entity in terms of the forecasts made in the liquidation plan, and because it considered that the offer submitted by the Reuben brothers did not fulfil the established requirements. The allegations were made by the banking group as creditor and offeror.

Nevertheless, the Commercial Court of Madrid explained that the execution of the liquidation plan, which regulates the procedures to be followed for the realisation of the assets, corresponds to the insolvency administration.

“The report presented explains the procedure followed for the selection of the bids submitted and the actions carried out by the insolvency administration, specifying that there are no justifications whatsoever to question it”, said the ruling, which states that the purpose of the plan is to obtain the greatest value from the asset for the benefit of all of the creditors.

In this way, despite the allegations presented by Ana Botín’s bank, the insolvency administration considers that, from an economic point of view, the offer presented by Sorlinda is the best for covering the loans of all of the creditors in the group.

The Reuben brothers, owners of other large assets

Reuben Brothers is a private investment group specialising in real estate development and debt financing. The company, created by two British brothers of Indian origin, is considered as one of the most exclusive in the world with several privileged properties in its portfolio, such as The Curtain and Members Club in Shoreditch, one of the most well-known luxury hotels in London, and Lingfield Park Marriott Hotel & Country Club.

It is also the owner of the London Oxford airport in Kidlington, the Wellington Pub Company chain of clubs and the Italian marina Portosole Sanremo, amongst others.

Ana Botín’s entity agreed the sale of its head offices in Boadilla del Monte to Marme Inversiones 2007 on 12 September 2008 for €1.904 billion.

Nevertheless, Marme Inversiones 2007 filed for creditors’ bankruptcy in 2014, before the Court then initiated the coordinated liquidation plan in October 2015 (…).

Original story: El Periódico

Translation: Carmel Drake

The Reuben Brothers Win the Bid for Santander’s Ciudad Financiera

12 November 2018 – El Confidencial

Banco Santander’s Ciudad Financiera has a new owner. The Reuben brothers have won the bid to acquire the headquarters of the Spanish bank, whose former owner, Marme Inversiones, filed for creditors’ bankruptcy. The Asian investors, who are residents in London and lovers of Ibiza, submitted the highest bid for the land in Boadilla del Monte (Madrid), fighting off competition from the bank itself chaired by Ana Botín and from the Arab fund AGC Equity Partners.

That is the result of the bid after the envelopes containing the final offers from the three candidates were opened by the bankruptcy administrator. Although the final price is not known, the offers amounted to around €3 billion, according to sources close to the operation, one of the largest operations ever in the real estate market in Spain involving a single asset.

From now on, to validate the purchase by the Reuben brothers, the judge from the mercantile court who is conducting the sale will have to certify that the offer from the London-based millionaires is correct, fulfils all of the requirements and complies with all of the analysis regarding transparency and money laundering. Nevertheless, and even if the judge gives his blessing, Banco Santander may exercise its right of first refusal, which gives it the last word for recovering the headquarters, which it sold in 2008 to a group of investors, who were also British, and with whom it agreed to remain as the tenant for forty years.

For that, the €500 million that Santander has paid Marme by way of rental over the last ten years has to be deducted from the final price, as does the €300 million of intra-group debt that is no longer taken into consideration following the entry into bankruptcy of the company.

Movements in the courts

Because what the Reuben brothers are now buying is the asset of a company that, after borrowing funds to pay even the tax on the original acquisition in 2008, can no longer keep up repayments on the loan it requested to acquire Ciudad Financiera and so filed for bankruptcy. After a long bankruptcy administration process, numerous claims by the creditors in the courts and offers from several international sovereign funds, the Spanish entity wanted to acquire the land of its headquarters in Boadilla del Monte (Madrid), where almost 7,000 people work.

The creditors of Marme Inversiones 2007 include ING, HSH Nordbank, CaixaBank and Bayeriche Landesbank, which granted a loan amounting to €1.575 billion to Propinvest ten years ago in the form of a leaseback arrangement with Santander’s largest real estate asset. Other entities also participated in that loan, including Deutsche Postbank, Royal Bank of Scotland and Raffeisen Zentralbank, which started to sell their stakes in the loan to vulture funds in 2011, with significant discounts on the nominal values, when the owner started to acknowledge that it was unable to make the debt repayments.

One of those who purchased that debt was Blackstone, together with other similar funds, such as Centerbridge and Avenue Capital. The first two submitted an offer to acquire Ciudad Financiera on 17 September, but their proposal was lower than those offers by Santander (…).

The Reuben brothers, which have purchased almost 168 hectares of land in Ibiza over the last two years, have submitted their bid for the Ciudad Financiera through Ibiza Properties LTD. That company was constituted on 1 August, with a nominal value of just GBP 100, money that it will now have to increase to cover the payment to the bankruptcy administrator.

Original story: El Confidencial (by Agustín Marcos)

Translation: Carmel Drake

Santander Awards the Management of Popular’s €5bn Portfolio to Blackstone

12 November 2018 – Expansión

Santander and Blackstone have reached an agreement whereby the US fund, through the real estate servicer Aliseda, has taken on the management of a portfolio of assets from Popular amounting to €5 billion, which Santander is retaining on its balance sheet. The portfolio includes real estate assets and loans linked to the retail segment and Santander is retaining ownership of 100% of the assets. They were left out of the transfer of Popular’s assets to Quasar, the joint venture that the bank and Blackstone launched last year.

Santander transferred the bulk of Popular’s damaged portfolio to Quasar (€30 billion gross, linked primarily to property developers), along with 100% of the share capital of Aliseda. Blackstone controls the management of Quasar and 51% of the shares and Santander the remaining 49%. The bank has this stake valued at €1.7 billion on its balance sheet.

“The assets under management have been classified into two different groups, to reflect their owner: the Santander Group portfolio, owned by Popular (and now absorbed by Santander) and the Popular portfolio, owned by Project Quasar 2017”, according to the annual accounts of Aliseda. Specific teams have been configured within the servicer to manage Santander’s assets.

As at June, the latest available disaggregated figures, the entity chaired by Ana Botín still had a portfolio of foreclosed assets amounting to €10.5 billion gross. They have been cleaned with €5.2 billion in provisions (48.9%), which brings their net value to €5.4 billion. Nevertheless, in September, it sold a portfolio of properties worth €1.5 billion to Cerberus. In addition, Santander has loans to property developers amounting to €5.7 billion. Of the total, €1.8 billion are doubtful balances, with a default rate of 32%.

Santander currently has agreements with three servicers (Altamira, Aliseda and Casaktua). It paid those three companies almost €460 million in management commissions last year.

Meanwhile, Aliseda, which is now controlled by Blackstone and Santander, has rescinded the syndicated loan that it signed in 2015. At the time, the funds Värde Partners and Kennedy Wilson owned 51% of the real estate manager’s share capital and Popular owned the remaining 49%.

Following the acquisition of Popular by Santander, the entity chaired by Ana Botón repurchased the 51% stake held by Värde Partners and Kennedy Wilson, as a step prior to the transfer of 100% of Aliseda to Quasar.

“According to the syndicated financing contract subscribed on 27 November 2015, the cancellation of the loan has been formalised, following the repayment of the principal and outstanding interest, and of the cancellation penalty for the overall amount of €266.03 million”, said Aliseda’s report.

The bank with the greatest share of the loan was Popular itself (33.33%), with an outstanding balance of €87.86 million at the end of 2017. Bankia, Santander, Sabadell and Bankinter, with shares of 10%, had outstanding balances of around €25 million each. ING (€24.3 million), Crédit Agricole (€23.3 million) and BBVA (€17.5 million) completed the group of banks in the syndicate.

The interest rate on the loan, conditioned on the debt ratio and the gross result of the company, was six-month Euribor plus a spread of between 2.75% and 3.50%.

Following the change of ownership of Aliseda and its senior management team, the servicer paid compensation for redundancies of €1.4 million last year. It also paid €5.64 million for a remuneration plan that granted certain executives the right to receive remuneration in the event of a change of control of the company.

Original story: Expansión (by M. Martínez)

Translation: Carmel Drake

Cerberus Completes Purchase of 35,000 Homes from Santander for €1.5bn

19 September 2018 – Eje Prime

Cerberus is strengthening its presence in the Spanish real estate sector with the purchase of a large portfolio of assets from Banco Santander. The US fund has reached an agreement with the financial entity to acquire a package of 35,700 residential properties for €1.535 billion.

The batch transferred by the Spanish bank has a gross value of €2.791 billion. The investment firm has been awarded the package in the end after significantly reducing the figure of €3 billion that it was expected to pay for the portfolio when the negotiations began.

The president of Banco Santander, Ana Botín, said in a statement that the exact percentage of the stakes that each party will hold in the new company that will be constituted following the formalisation of the transaction has not been determined yet. Nevertheless, Cerberus will control between 51% and 80% of the share capital, according to the senior executive.

Botín, who has indicated that the sale will have an “immaterial” impact on the results of the bank, expects the agreement to crystallise completely during the last quarter of this year or the beginning of 2019.

Original story: Eje Prime

Translation: Carmel Drake

Cerberus to Buy €5M Portfolio from Santander whilst BdE Reviews its Deal with Sabadell

19 September 2018 – El Confidencial

Banco Santander has chosen a buyer for the last portfolio of toxic assets that it still has on its balance sheet. The chosen entity is Cerberus, the opportunistic fund with which the bank chaired by Ana Botín has been holding exclusive negotiations for the sale of the so-called Apple portfolio, which has a nominal value of €5.1 billion, according to confirmation from sources close to the operation. If the deal is closed, the US entity will be the owner of a large part of the real estate business of Santander, BBVA and Banco Sabadell.

The final agreement depends exclusively on locking down the price that Cerberus is offering and that Santander hopes to obtain. The operation could be closed for a price of between €2.8 billion and €3.2 billion, according to the same sources. Banco Santander declined to make any official comment about this information, just like Cerberus. Debtwire, the specialist medium for professionals in financial markets revealed the name of the US fund as the main candidate to acquire this portfolio on 3 September.

If the exclusive talks prove fruitful, Cerberus will fight off competition from Apollo, Lone Star and Blackstone, the other three vulture funds that have also bid for this portfolio of homes, premises and land that Santander foreclosed in exchange for the non-payment of loans by its clients. In theory, the natural winner of the auction was going to be Apollo, which reached an agreement in principle with the Cantabrian bank at the beginning of August for around €2.9 billion.

Nevertheless, that deal fell apart in the middle of last month, to the anger of the fund led at that time by Andrés Rubio, President of Altamira, the real estate company owned jointly by Apollo and Santander since 2013. Rubio left Apollo in the middle of the transaction, which further weakened that firm’s chances of becoming Santander’s natural partner.

With this operation, Spain’s banks will complete the transfer of the majority of the risk linked to the property sector that they still have left over following the financial crisis. In fact, Santander already sold half of the toxic portfolio that it inherited from Popular last summer 2017 – €30 billion – to Blackstone for around €5 billion. Afterwards, BBVA placed almost €13 billion with Cerberus, whilst Lone Star acquired a portfolio worth €6.7 billion from CaixaBank along with its real estate arm Servihabitat.

The most recent high profile transaction announced was the purchase by Cerberus of €9 million of doubtful assets from Sabadell. Nevertheless, that operation is now being reviewed by the Ministry of the Economy given that the Deposit Guarantee Fund is going to have to recognise losses of around €3 billion as a result. That money will go against the State’s own income statement, given that what the Catalan bank, headquartered in Madrid, has sold to the US fund is the former Caja de Ahorros del Mediterráneo (CAM) portfolio, for which it received an asset protection scheme (EPA) (…).

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake

Centerbridge & Blackstone Join Forces to Bid for Santander’s Ciudad Financiera

13 September 2018 – Expansión

A consortium led by the US funds Blackstone and Centerbridge is emerging as the main favourite to buy Banco Santander’s headquarters in Boadilla del Monte (Madrid), in one of the largest real estate operations of the year in Spain, which is set to exceed €3 billion.

The court that is overseeing the creditors’ bankruptcy of Marme Inversiones, the company that has owned the so-called Ciudad Financiera Santander since 2008, has asked the parties interested in purchasing this asset to submit their binding offers by Monday 17 September at the latest. The objective of the bankruptcy administrator is to use the funds raised to repay Marme’s debt in full.

According to market sources, the funds GSO (a subsidiary of Blackstone specialising in restructured debt) and Centerbridge are preparing a joint offer that could amount to €3.1 billion. These investors are negotiating to finance their proposal with a loan that could be led by Deutsche Bank.

Second attempt

Both GSO and Centerbridge are now creditors of Marme, given that they purchased some of the debt from the banks that loaned money to the company back in the day. Their bid could be pitted against others from creditor funds such as Avenue Capital, according to sources close to the process.

During the creditors’ bankruptcy, which began in 2014, GSO and Centerbridge already tried to take control of the company, with a proposal to buy Marme’s share capital and retain the current debt. It was a similar strategy to the one pursued for several years by Aabar (an Abu Dhabi fund) together with the British-Iranian investor Robert Tchenguiz, after buying some of the debt granted to Marme by the bank RBS.

But the administrator has decided to conduct a formal auction so that the interested parties can bid together for the Ciudad Financiera and whereby allow all of the liabilities to be repaid. The creditors believe that offers above €3 billion will be necessary to recover all of the principal and interest.

Just as Blackstone and Centerbridge seem willing to formalise an offer in compliance with the conditions established by the judge, it is not clear whether Aabar is going to participate in the auction. In recent months, the fund has been caught up in a legal dispute with Tchenguiz regarding their joint investment in the company that currently owns the Boadilla campus.

The Kuwaiti fund AGC Equity Partners is also analysing the possibility of submitting an offer for the Ciudad Financiera. Almost two years ago, that firm submitted an offer for €2.7 billion to acquire the headquarters of the Spanish bank, but it did not get the go-ahead because the creditors’ bankruptcy was in an incipient phase and because Santander threatened to exercise its right of first refusal to buy back its offices.

Long-term rental

The investors Glenn Maud and Derek Quinlan, who already owned the Citi skyscraper in London, purchased the headquarters of the Spanish bank in 2008 for €1.9 billion, for which they used a loan from a group of banks led by RBS. Shortly after the acquisition, problems started with meeting the conditions of the loan, which ultimately led to the creditors’ bankruptcy of Marme Inversores, one of the instrumental companies created by Maud and Quinlan to carry out the transaction (…).

The main appeal of the Ciudad Financiera is the fact that the bank chaired by Ana Botín has committed to remain as the tenant for 40 years, until 2048. On that date, the Spanish entity may negotiate an extension to the lease contract or repurchase the property.

Three options

Once the offers have been presented next Monday before the Mercantile Court number 9 of Madrid, which is leading the bankruptcy, three possible alternatives may ensue.

If there are several attractive bids, the judge may open a process to competitively improve the prices proposed. If there is only one offer, of an appropriate value to pay the creditors, then it may be accepted immediately (…).

The last possibility is that the offers do not reach the estimated valuation. In that case, the judge may change the strategy and allow the piecemeal sale or liquidation of the different liabilities of Marme Inversiones (…).

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake

Project Apple: Apollo Bids Hard for Santander’s Last Real Estate Portfolio

30 July 2018 – El Confidencial

Project Apple, the name chosen for the €5 billion real estate portfolio that Banco Santander has put up for sale, is entering the home stretch. The entity chaired by Ana Botín has asked the interested funds to submit their definitive offers this week, according to sources close to the operation.

As this newspaper revealed, the firms that have expressed their interest in the operation include the giants Lone Star, Cerberus, Blackstone and Apollo, although, the latter two are regarded as the favourites, given that they have significant recent history with the Cantabrian bank’s property.

Just one year ago, Blackstone was awarded project Quasar, the €30 billion portfolio of gross toxic assets that Santander sold (following its acquisition of Banco Popular). Meanwhile, Apollo owns 85% of Altamira, the real estate asset manager that the financial entity created and which is currently administering the €5 billion portfolio up for sale.

Having been left out of all of the major real estate processes involving the banks, Apollo has decided to bid hard for Apple, according to the same sources, a move that has been launched in parallel to the possible sale of  (its stake in) Altamira, the manager that would lose some of its appeal if another fund were to manage to acquire this portfolio.

In addition, the firm led in Spain by Andrés Rubio has just reached an agreement with Santander to modify Altamira’s management contract and to refinance the servicer’s debt, in a deal that has allowed the fund to distribute a dividend of €200 million.

For Santander, the sale of Project Apple will mean completing the divestment of all of its real estate exposure, a move that took a giant leap forward last year with the transfer of the Quasar portfolio to Blackstone.

Nevertheless, and precisely because it has already cleaned up the bulk of its balance sheet, the entity does not have any need to sell and, therefore, if the bids come in below its expectations, it may decide not to transfer the portfolio after all, at least not through this process.

After the Cantabrian bank, BBVA reached an agreement with Cerberus to sell it 80% of its toxic property, whose gross value amounts to €13 billion, in an operation that is expected to be completed later this year.

More recently, CaixaBank reached an agreement with Lone Star to sell it 100% of Servihabitat and the majority of a portfolio of properties worth €6.7 billion; and Banco Sabadell made a deal to transfer €12.3 billion in toxic assets to Cerberus (€9.1 billion), Deutsche Bank (€2.3 billion) and Axactor (€900 million).

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Santander & Sabadell Need To Recognise c. €400M in Provisions to Cover Sareb’s Losses

2 July 2018 – El Confidencial

The bad bank is continuing to generate problems for the Spanish financial sector. Both for the State, due to the stake held by the Spanish Fund for Orderly Banking Restructuring (FROB), and for the large banks, which own 55% of the entity’s share capital. In this way, the deterioration of the Company for the Management of Assets Proceeding from the Bank Restructuring (Sareb) is going to have repercussions for the banks, which will need to recognise additional provisions worth €402 million.

Specifically, the company chaired by Jaime Echegoyen (pictured above) has updated its business model to reflect forecast losses of 73% of the initial investment, which amounted to €4.8 billion in 2012 split between share capital (€1.2 billion) and subordinated debt (€3.6 billion). “It has performed a reality check, so now we know the figures that we have to stick to”, said one banking executive.

The entities most affected by these revised forecasts are Santander, following its incorporation of Popular, which now owns 22.22% of Sareb; CaixaBank with 12.24%; and Sabadell with 6.61%. Nevertheless, “the impact ought to be very limited, given that “the banks already have provisions to cover the majority of those losses”, explains Nuria Álvarez, analyst at Renta 4, in a note from the bank analysing Sareb’s revised business plan.

Banco Santander has a €1.07 billion exposure to Sareb, although it has now provisioned 50% of that figure, and so it needs additional provisions amounting to €246 million, according to calculations by JP Morgan. The analysts reduce the impact to less than 2% of the profits of the group chaired by Ana Botín.

Impact for Sabadell

The other entity that stands out in this sense is Sabadell, which, according to the US bank, has an exposure amounting to €323 million with current provisioning levels covering 29%, divided between €228 million in share capital and €95 million in subordinated debt. Therefore, according to these calculations, Banco Sabadell needs to recognise additional provisions amounting to €142 million.

The third bank with provisioning needs is CaixaBank, on the basis of these estimates, although they are somewhat residual. The bank chaired by Jordi Gual has an exposure amounting to €593 million, but with a 70% provision, meaning that its shortfall amounts to just €18 million. Meanwhile, Bankinter and Bankia do not have any provisioning needs, according to JP Morgan, and BBVA did not participate in the creation of Sareb.

The bad bank was created in 2012 to assist with the digestion of toxic property in the financial sector. Under the then presidency of Belén Romana, who has recently joined Santander’s Board ahead of the upcoming departure of Rodrigo Echenique, the entity promised profits to the banks to attract capital. The deadline for the completion of Sareb’s work is 2027, the year for which the revised business plan forecasts losses with respect to the initial investment.

Original story: El Confidencial (by Óscar Giménez)

Translation: Carmel Drake

Santander Values its Stake in the JV with Blackstone at €1.566bn

16 May 2018 – Expansión

Santander has recorded on its balance sheet its 49% stake in the company that it has created with Blackstone for a value of €1,566 million. The stake has been recognised in the portfolio of investments in joint ventures and associated companies. The bank and the US fund, which controls the remaining 51% of the JV’s share capital, constituted the company on 22 March. The alliance, a conglomerate of companies grouped together under the parent company, Project Quasar Investments 2017, brings together the former real estate portfolio of Popular. It contains gross assets worth €30 billion, which have been appraised at €10 billion net under the framework of the transaction.

Meanwhile, the two partners have now agreed on the configuration of the Board of Directors for the joint venture. The governance body will comprise seven members. In line with the distribution of the share capital and its control of the management of the assets, Blackstone will have a majority of four positions on the Board, including that of Chairman.

Santander will be represented by three directors. One of them is Javier García Carranza, the executive to whom the entity chaired by Ana Botín has entrusted the process to clean up Popular’s balance sheet. García Carranza is the Deputy CEO of Grupo Santander and a member of Popular’s Administration Board, a transition body that will disappear once the legal merger of the two banks has been completed. García Carranza also represents Santander on the boards of Sareb, Metrovacesa and the real estate manager Altamira, amongst other companies.

The other directors linked to Santander that will sit on the Board of the joint venture are Carlos Manzano and Jaime Rodríguez-Andrade, specialists in real estate investments and asset recoveries, respectively.

Meanwhile, Diego San José, Head of Blackstone’s Real Estate division in Spain is going to be the Chairman of the company. Eduard Mendiluce, Jean Francois Bossy and Jean Christophe Dubois are the other directors who have been appointed by the fund.

In order to launch the company, Santander and Blackstone have subscribed a syndicated loan amounting to €7,332 million. Several banks have participated in the loan, which is led by Morgan Stanley and Deutsche Bank, including Bank of America Merrill Lynch, JP Morgan and RBS, as well as Blackstone itself, which has contributed €1 billion. The financing has been signed over a 5-year term and matures in 2023.

The sale of Popular’s real estate portfolio and the deconsolidation of the assets have resulted in a 10 point improvement in Santander’s core capital ratio. Its solvency now stands at 11%, the target for 2018.

Original story: Expansión (by M. Martínez)

Translation: Carmel Drake