Tag: balance sheet

Ibercaja Completes Sale Of Caja 3’s Industrial Portfolio

13 September 2016 – Expansión

Ibercaja is still putting the shine on its balance sheet ahead of its IPO, which is expected to take place at the end of next year or the beginning of 2018. Having transferred the administration and sale of 14,000 real estate assets to the platform Aktua in February, it is now on the verge of getting rid of all of its non-strategic holdings.

According to sources at the group, the bank has divested more than 200 business projects since 2012, which has allowed it to reduce its volume of portfolio investments by approximately €285 million. But the most important achievement is that it has now managed to finalise the investment plan inherited from Caja 3, as defined by Brussels, when that entity received public aid in 2012. 129 companies from the former savings banks were identified with an investment volume of €153 million, which means that Ibercaja is fulfilling all the requirements.

Nevertheless, it still needs to return that aid. Caja 3 received €386 million in contingent convertible bonds (CoCos) signed by the FROB, of which Ibercaja returned €20 million in March. The remaining balance has to be repaid between March and December 2017.

These divestments represent one of the pillars of Ibercaja’s strategic plan for 2015-17, together with the repayment of the aid; the issue of €500 million in subordinated debt from last year; the sale of problem debt to property developers; the transfer of its real estate assets to Aktua; and this year, its growth plan in Madrid; and its digitalisation plan, for which it has signed a strategic agreement with Microsoft.

In fact, within its specific divestment plan for 2015-2017, approximately 100 companies were identified as possible divestment targets, whereby reducing the volume of its investment portfolio by approximately €180 million. Currently, according to sources at the group, it has divested 53 companies, including total and partial sales. In total, it has decreased its investment in corporate projects by €68 million, with a positive contribution to the group’s consolidated result of €10 million. Its profits amount to €23 million since 2012. Meanwhile, sources at the group added that capital amounting to €27 million has also been freed up. In total, own funds have increased by €50 million.

The companies

In addition to the sale of Gestión de Inmuebles Salduvia, which was included in the agreement reached with Aktua in February this year, Ibercaja’s other major divestments include, by order of importance: the divestment of the Naturiber Group (specialising in the meat sector), Portobelio and Ahorro Corporación Infraestructuras (private equity funds), Ahorro Corporación Gestión (the fund manager), Titulización de Activos, Imaginarium (the toy retailer) and ATCA (a technology development company).

Over the next few years, Ibercaja plans to continue executing its divestment plan, which involves more than 50 additional sales, which will allow it to reduce its portfolio by approximately €112 million more, with the resulting positive impact on the income statement and an efficient allocation of capital.

Ibercaja reported profits of €72.3 million during the first six months of 2016, up by 3.7% compared to a year earlier, thanks to the sale of its real estate arm, as well as sales of debt.

Original story: Expansión (by D. Badía)

Translation: Carmel Drake

Bank Of Spain Puts Pressure On Banks To Accelerate Property Sales

7 September 2016 – Cinco Días

The Bank of Spain wants Spain’s financial institutions to speed up the sale of their foreclosed assets and get rid of their toxic assets as soon as possible. The supervisor has been unmoved by the banks’ requests to relax some of the interpretations of the accounting circular 4/2016, which comes into force in October, governing their provisions against properties. The banks still hold more than €84,000 million of foreclosed assets.

Spain’s banks are finalising the figures for the new provisions that they will have to make following the entry into force of accounting circular 4/2016 and in particular, its Annex IX, on 1 October, which modifies circular 4/2004 for credit institutions. Initially, the Bank of Spain said that this new standard would hardly affect the final calculation of the sector’s provisions this year, but the reality is somewhat different, at least for several institutions, according to financial sources.

The body led by Luis María Linde has tightened the provisions for foreclosed assets. This twist has forced several entities to make fresh efforts in terms of their provisions, which will be deducted from their income statements. In response, some of the financial institutions had asked the Bank of Spain, during meetings that they are holding regarding the application of this circular, to relax certain concepts and interpretations of the standard. But it seems that the national supervisor has been indifferent to these requests, according to sources in the sector.

Ultimately, the Bank of Spain wants to force the banks to accelerate their property sales and get rid of their real estate assets as quickly as possible. Sources in the sector say that this is the message that the supervisor has been communicating in its meetings with the banks.

Linde wants the sector to significantly reduce their assets, which amounted to more than €84,000 million at the end of 2015. Sources indicate that the Bank of Spain has not set a date for this reduction, but it seems to be clear from both the conversations and the regulations that it seeks to considerably reduce the figure over the next three years. The problem is that the foreclosed asset balance has increased quarter after quarter since the outbreak of the financial crisis in 2008, despite attempts by the sector to sell off properties at significant discounts.

In fact, the heavy weight that these foreclosed assets continue to represent on the balance sheets of Spain’s banks is one of the main criticisms levied by the European Central Bank and other international supervisors.

Over the last three years, the banks have accelerated the sale of these assets, but the incoming volumes still exceed those sales. In addition, the large speculative investment funds, which were previously committed to purchasing large packages of properties, have now reduced their operations, and some are even exiting from certain property purchase operations ahead of time as they are obtaining lower returns than expected, indicate sources at one major bank.

The new accounting circular not only affects the financial institutions, but also the partners that manage those properties, such as Altamira, Aliseda, etc. In the case of La Caixa, it affects its holding company, Criteria, which owns €2,600 million of foreclosed assets and CaixaBank, which holds another €7,122 million. The same thing has happened in the case of Bankia, with the circular affecting both the bank and its parent company BFA, even though that group transferred most of its foreclosed assets to Sareb.

The main domestic banks are racing against the clock to ensure that the Bank of Spain approves their internal risk coverage models, including foreclosed assets, before the end of December, which, according to several sources, would bring some relief in terms of their new provisions. The circular also requires the banks to perform annual appraisals of their foreclosed real estate assets (…).

Original story: Cinco Días (by Ángeles Gonzalo Alconada)

Translation: Carmel Drake

Insurance Companies Have Unrealised Gains Of €2,400M From RE

26 August 2016 – Expansión

Mapfre, Mutua Madrileña and Catalana Occidente own the majority of the real estate in the insurance sector, whose total portfolio amounts to €4,475 million.

Insurance companies in Spain are accumulating a cushion of unrealised gains in their real estate investments amounting to €2,433 million, according to data from the Director General of Insurance and Pensions.

This amount is the difference between the value that the companies assigns these assets on their balance sheets and the market price of these assets, according to the mandatory appraisals that have to be performed periodically by independent appraisers.

These latest gains in the insurance sector are still well below the threshold of €4,226 million achieved in 2009, at the beginning of the burst of the real estate bubble.

Unrealised gains are recognised in the accounts of entities if the properties are sold at a profit. They are also included in the calculation to measure the solvency margin of the entities, which measures the firms’ strength to deal with unforeseen events using their uncommitted assets.

Insurance companies have traditionally invested in properties, given that they are a particularly appropriate asset for the long term over which they conduct their activity. They also generate regular income in the form of rental payments.

In addition, insurance companies have had to diversify their portfolios following the decrease in interest rates in recent months, which makes the investment strategy of these entities more complicated; they have traditionally focused on public debt, primarily in Spain.

Purchases

Insurance companies are risk averse in their investments and in the face of this new panorama, they have made several purchases that have increased their real estate portfolios, particularly important for the Spanish capital firms Mapfre, Mutua Madrileña and Catalana Occidente, which own the majority of the sector’s total portfolio of €4,475 million, according to data from the Director General of Insurance and Pensions. In recent months, these three entities have been involved in several real estate purchases amounting to more than €250 million. (…).

The Mapfre Group, which has a presence in fifty countries, reported latent gains of €975 million in its accounts for 2015 on the basis of the book value of its total real estate portfolio (€2,267 million) and the market price (€3,242 million). Most (56% or €1,835 million) correspond to real estate investments, whilst the rest (44% or €1,406 million) are properties used by Mapfre. (…).

Meanwhile, Mutua has accumulated a piggy bank of unrealised real estate gains amounting to €462 million, with total assets worth €1,443 million at market prices and €981 million on the balance sheet. Its assets are concentrated in Madrid, where historically it has owned a handful of individual buildings on Paseo de la Castellana. (…).

Grupo Catalana Occidente’s investment in real estate amounts to €1,024 million, which includes unrealised gains amounting to €465 million. The insurance company, which has a presence in more than fifty countries, acquired a building measuring almost 4,000 sqm in the 22@ district in Barcelona in July.

Original story: Expansión (by E. del Pozo)

Translation: Carmel Drake

Quabit’s Losses Decreased By 45% In H1 2016

16 August 2016 – Expansión

Quabit has closed the first half of the year with a net loss of €3.29 million, representing a reduction of 45% compared with H1 2015. The firm chaired by Félix Abándades has multiplied its revenues five-fold, to €21.1 million, and has reduced its net debt by 4% to €216.8 million as at the end of June.

The real estate group recorded gross operating losses of €3.45 million, which represents a reduction of 41% with respect to the negative balance recorded during the same period in 2015.

Quabit – which is in the middle of a five year business plan – underlined the fact that both the generation of revenues as well as of profits will “happen gradually” as its residential projects progress. They have a maturity period of between 24 to 36 months, which means that, during the first two years of the plan, the company’s EBITDA will remain negative.

The group added that, during this period, it will be possible to obtain profits through discounts on its debt and the gradual activation of tax credits. Quabit has agreed payment conditions on its debt that will allow it to register profits from discounts on its debt amounting to €55 million. It also has unregistered tax credits on its balance sheet amounting to €183 million.

On Friday, the company’s share price fell by 0.31% on the stock exchange to €1.74.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Bain Capital Raises €2,770M & Sets Its Sights On Spain

8 August 2016 – Expansión

Bain Capital wants to become one of the largest buyers of real estate in Spain. On Thursday, the US fund announced that it has completed the acquisition of three asset portfolios from Spanish banks, worth €1,146 million, over the last few months. The sellers are Cajamar, Sabadell and Bankia in three separate deals.

The acquisitions have been made through the fund’s Bain Capital Credit business unit, known until now as Sankaty.

And as if that weren’t enough, in the last few days, the US investor has completed the creation of a new fund in the USA worth $3,100 million (€2,769 million) for distressed investments (assets close to bankruptcy) and assets in special situations, according to Bloomberg.

“We see potential for making new investments in the Iberian Peninsula, especially in the real estate and overdue loan markets”, said Fabio Longo, CEO and Head of the real estate and overdue loan business in Europe at Bain Capital Credit. “We are excited about the opportunity to consolidate our position in the market for non-performing real estate assets in Spain through these investments”, added Alon Avner, CEO and Head of Bain Capital Credit’s European business.

Individual transactions

Of the three portfolios purchased, the largest was bought from Cajamar, containing €511 million of overdue syndicated and bilateral loans, granted primarily to real estate developers in different phases of bankruptcy. This deal, known as Project Baracoa, was the first major competitive sale of loans by a Spanish entity.

In addition, Bain Capital Credit acquired a portfolio of loans with a nominal value of €415 million from Sabadell, comprising overdue loans to property developers, mainly secured by residential and tertiary assets. This operation was known in the market as Project Pirene.

The most recent purchase by the US fund in Spain involved the Project Lane portfolio, comprising €220 million of foreclosed assets sold by Bankia. This was the first operation of its kind carried out by the nationalised group after the failed sale of Project Big Bang at the end of last year, through which it had wanted to sell all of the homes, developments and land on its balance sheet. In the end, Bankia was unable to reach an agreement with the investor who had expressed the most interest, Cerberus.

For all of these operations, Bain Capital has been advised by the asset managers Copernicus, HipoGes and Altamira; the consultancy firms Aura REE and CBRE; and the lawyers J&A Garrigues and Cuatrecasas.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Santander Considers Repurchasing 85% Of Altamira From Apollo

27 July 2016 – Expansión

The financial institution is considering taking back control of its real estate platform to improve its margins and create a large global firm to provide services in other countries.

The sale of Altamira could turn full circle. Santander and the US fund Apollo have held meetings in recent weeks to discuss the possibility of the Spanish bank repurchasing 85% of the real estate platform, according to financial sources consulted by Expansión.

These negotiations come just two and a half years after the financial institution decided to get rid of its controlling stake in the real estate platform. Then, Apollo fought off other funds in a competitive process in which it paid €664 million for 85% of the company, generating a gross profit of €550 million for the bank.

According to financial sources consulted, Santander’s new approach has arisen for three main reasons: the aim of creating a new area for the management of doubtful assets at the global level, ahead of the forecast increase in default rates in countries such as Brazil; to improve its margins, given that the current agreement forces the bank to pay commission to Altamira; and to take advantage of the financial improvement that Altamira is enjoying.

For the time being, the plans are in a very preliminary phase and both Santander and Apollo have explored other options for Altamira. One of the options would involve a movement in the opposite direction from the 85% repurchase: namely, to extend Apolllo’s agreement to other countries.

New management

Since Apollo took control of Altamira, changes have been introduced in the management of the platform with the aim of maximising sales. One of the new administrators’ great successes came when the company was awarded one of the four management contracts that Sareb put up for tender at the end of 2013.

Specifically, Altamira Asset Management took over the second largest contract on offer, comprising 44,000 properties and loans to doubtful property developers that had been originated by Catalunya Ciaxa, BMN and Caja 3, worth €14,000 million initially. To win this tender, the platform controlled by Apollo paid out €174 million as a deposit for this contract, which it will recover as it achieves its objectives.

In addition to these assets, Altamira administers foreclosed properties and loans linked to properties from Santander and from its main shareholder Apollo. Nevertheless, the Spanish bank will reduce the perimeter of the assets that it holds on its balance sheet as a result of the merger between Metrovacesa and Merlin Properties.

According to its accounts for 2015, Altamira Asset Management Holdings, the company in which Altamira holds a 85% stake, recorded profits of €25.2 million last year, down by 11% compared to the previous year. Part of that decrease was due to the costs of migrating Sareb’s portfolio of assets. Its turnover amounted to €267 million and the operating profit stood at €81 million. The company forecasts that its profits will increase this year thanks to the sales it will generate from Sareb: “In 2016, we will manage Sareb’s portfolio for the whole year, which is expected to increase the group’s turnover”, according to last year’s annual accounts.

Original story: Expansión (J. Zuloaga)

Translation: Carmel Drake

Popular Engages Deutsche To Sell RE Assets Worth €4,000M

13 July 2016 – Expansión

Banco Popular has almost oiled the machinery that it will use to remove between €3,500 million and €4,000 million in property from its balance sheet. The entity chaired by Ángel Ron (pictured above) has engaged Deutsche Bank and EY to create a real estate company, which will be opened up to investors, in order to deconsolidate its assets, according to financial sources.

The plans are already well underway, although the complexity involved means that they will probably be delayed until the end of the year.

For the time being, Popular and its two advisors will focus on defining the perimeter of the assets to be transferred to the company and in creating the ideal structure. To this end, the bank will write to Spain’s National Securities Market Commission (CNMV) to obtain the necessary authorisations.

The plan being carried out by the entity is very similar to the one conducted by Santander, and to a lesser extent by BBVA, with Metrovacesa, when it reduced its stake and transferred its assets in order to deconsolidate them from their balance sheets. That forms part of the merger plan with Merlin Properties. Popular also owns a stake in Metrovacesa, and so has followed the process closely.

In theory, all of the assets to be transferred to the new company will be foreclosed: land, homes and work in progress properties. The new company will have its own management team, which will operate independently of the bank chaired by Ron.

Popular owned €16,132 million in foreclosed assets at the end of 2015. Of those, €4,352 million related to finished buildings; €6,685 million was land; €1,436 million comprised homes proceeding from (unpaid) mortgages; €398 million related to buildings under construction; and €3,255 million corresponded to other assets.

Problematic assets

In addition to these foreclosed assets, Popular held doubtful loans to property developers, which took its total exposure to problem assets to €34,000 million, making it the financial group with the largest real estate inheritance in the financial sector at the end of 2015.

That situation movitvated the €2,500 million macro capital increase that the entity completed last month. One of the main objectives was to increase the coverage of the problem assets from its current level of 38% to 50%, in line with the rest of the sector. The low coverage ratio was one of the impediments facing the entity in its efforts to undertake large sales of real estate assets.

The bank’s strategic plan involves reducing the volume of problem assets by €15,000 million between now and 2018, to €19,000 million.

In addition to its large operations, such as the one it is working on with Deutsche Bank and EY, Popular is also promoting the sale of properties through its commercial network and its real estate manager, Aliseda. That company is controlled by Värde Partners and Kennedy Wilson, which together own a 51% stake in the share capital, and Popular, which holds the remaining 49% stake.

Investors

Värde Partners is one of the major investors who will be invited to participate in the company. In addition to Aliseda, the US fund has joined forces with the bank in its credit card business, WiZink, in which it acquired a 51% stake. Värde also recently launched its own property developer, Dospuntos, which has an ambitious investment plan amounting to €2,000 million. Even so, the project will also be opened up to other international and domestic investors.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

Banks Sell €11,000M NPLs To Clean Up Their B/Ss

30 June 2016 – El Confidencial

Property is still the main obstacle facing Spain’s banks. Although the majority of the domestic financial entities will comfortably pass the European Central Bank (ECB)’s upcoming stress test, most are still weighed down by non-performing loans linked to the real estate sector, which are blackening their balance sheets. To this end, CaixaBank, Bankia, Sabadell, Popular and even Deutsche Bank have put portfolios of non-performing loans up for sale amounting to almost €11,000 million, according to data compiled by El Confidencial.

The most active bank is Sabadell, which has engaged KPMG, PwC and N+1 to help get rid of €3,100 million in consumer loans, credit cards and loans granted to property developers. Of that amount, €1,000 million was sold to the funds Lindorff and Grove Capital last month in an operation known as Corus. Now, the entity has another €1,700 million on the market (Project Normandy), containing foreclosed loans from real estate developers and almost €500 million (Pirenee) corresponding to a mixture of assets. The entity is looking to close both transactions before the summer holidays.

After Sabadell, the most active bank in cleaning up its balance sheet is CaixaBank, which has two processes underway and one in the bag. These include the so-called “Project Carlit”, launched in April with the help of PwC to sell off €750 million in loans linked to shopping centres, offices and the industrial sector; and “Project Sun”, a portfolio of loans granted to almost 150 hotels that the entity foreclosed from businessmen in the sector. In total, around €1,000 million in non-performing loans.

The latter is backed by 11,000 tourist rooms, and several opportunistic funds may be interested, including Starwood, Davidson Kempner Capital and Bank of America. Those entities previously acquired similar liabilities from Bankia in 2014 and 2015 for €1,200 million. In Septemeber, the Catalan entity is planning to launch “Project More 2” containing €200 million of real estate loans, again with the help of PwC.

Bankia, which last year failed to find a buyer for its huge real estate portfolio containing €4,800 million of assets has engaged KPMG, Deloitte and PwC to advise it in 3 of its operations: “Project Lane” (€288 million), “Project Oceana” (€396 million) and “Project Tizona” (€1,000 million). The latter comprises residential mortgages and is the second part of the transaction known as “Project Wind”, when the entity sold €1,300 million in similar liabilities to the fund Oaktree.

Alongside these three major players, several other entities also have operations on the market, including Popular, Banca Mare Nostrum, Abanca (which just sold €1,300 million in NPLs to EOS) and Ibercaja…But the entity that has drawn the most attention is Deutsche Bank, because it had not chosen to clean up its accounts in this way until now. The German group, the only foreign bank with a presence in Spain, which has an extensive network of offices, is sounding out institutional investors regarding the sale of €800 million in non-performing mortgages.

Although the German entity was not greatly impacted by the real estate crash, thanks to its prudent strategy vis-à-vis granting property-related loans, the truth is that it was weighed down by packages of unpaid loans from high income clients. Antonio Rodríguez-Pina, Chairman of the bank’s Spanish subsidiary, has decided to get rid of these NPLs in order to improve its balance sheet and reduce the default ratio, a measure that coincides with Deutsche Bank’s decision to continue its operations in Spain, for the time being. (…).

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake

Santander & BBVA Will Transfer c.7,500 Homes To Testa

28 June 2016 – El Confidencial

Spain’s largest landlord is called Testa Residencial. This is the company that has been chosen by Merlin and Metrovacesa to take over all of the homes that they have for rent – 4,700 properties in total – and to create a new jointly owned company in which the former will hold a 34% stake and the later, the remaining 66% stake.

But those numbers are just the first step of a calculated road map designed by the banks that own Metrovacesa – Santander, BBVA and Popular – which want to take advantage of this new arrangement to get rid of thousands of homes from their own balance sheets.

Although still in the analysis phase, according to sources in the know, the entity chaired by Ana Botín (pictured above) wants to transfer between 4,000 and 6,000 homes, whilst BBVA hopes to transfer around 2,500 of the homes that form part of its real estate portfolio, closed eight years ago.

During the harsh years of the real estate crisis, the two entities struggled to cope with this load, along with the rest of the sector, following the debacle that began back in 2007. But now, they have found a way of reducing the burden.

In fact, if the plans go ahead as expected and they receive all of the necessary blessings, the two entities may begin transferring assets this year, a move that would turn Testa Residencial into the largest rental home company in the country, ahead of Fidere, within a matter of months.

Depending on the final number of homes that end up being transferred to Merlin Properties’s subsidiary, the future Socimi will own between 11,000 and 13,000 homes for rent, which means that it will compete head to head with Azora, which owns 11,892 homes and far exceed the 6,000 homes owned by Fidere and the 775 held by Hispania, the Socimi managed by Azora, which has already announced its decision to put the brakes on its residential business.

Five years to debut on the stock market

Now that this giant has been created, the real challenge for all of its shareholders will be its debut on the stock market, the natural destination and reason why they have created this joint Socimi, which has been given a maximum period of five years to complete its IPO.

First, they must define the definitive portfolio of homes, value them, get rid of those assets that do not fit within the plans of the new Socimi through small operations, and above all, find the ideal window of opportunity on the market for the debut.

The key to the success or failure of this business will depend on the price at which Merlin and the banks manage to sell their shares when the time comes to list the subsidiary on the stock market. (…).

The new Testa Residencial that will emerge from this agreement has been given a period of two years to become a Socimi. Its shares are held by Merlin (34.24%) and the banks (65.76%), as follows: Santander 21.95%; BBVA 6.41% and Popular 2.86%.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Sareb Sold 25 Homes Per Day During H1 2016

15 June 2016 – El Mundo

The Chairman of Sareb estimates that the company sold 25 real estate assets per day during the first half of 2016, a pace that he considers “normal”, albeit below the historical average of 27 properties per day for the last 3years, since the so-called bad bank was created.

“At Sareb, we are constantly pedalling hard. We can’t stop”, said Jaime Echegoyen, who also pointed out that the company has debt to pay off. In this regard, he estimated that Sareb has already paid €3,100 million in interest.

He also admitted that the banks’ efforts to clean up their balance sheets by selling off real estate assets is affecting Sareb’s rate of property sales, due to increased competition. Nevertheless, he said that Sareb will benefit from the trump card in that it has on its side, namely, time.

“Sareb is not in any rush (to sell)”, he said at a summer course organised by the Universidad Internacional Menéndez Pelayo (UIMP) and the Asociación de Periodistas de Información Económica (APIE).

No plans to demolish any properties

The Chairman of Sareb reaffirmed an earlier prediction that the company will stop losing money in 2017 and he confirmed that the bad bank does not expect to undertake any demolitions, despite the fact that some of the assets on Sareb’s balance sheet may take years to sell or “may never be sold”. “Would it be better to knock them down than hold onto them? Perhaps, at first”, he reflected, before adding: “But we are not thinking about demolition, because you need money for that”.

Echegoyen stated that the revenues that the bad bank is generating are mostly being used to pay off debt. In a summary of Sareb’s first three years of life, Echegoyen said that the company has sold 35,200 properties and generated revenues of €12,800 million. In addition, the so-called bad bank has reduced its portfolio by €7,800 million and has repaid €7,700 million (of debt).

On the other hand, Echegoyen stated that the real estate sector “has woken up with clarity” and is enjoying a really “sweet moment”, judging by the recovery in the number of construction permits for new homes and the “stability” that demand for real estate is showing.

Homes as a haven

The Chairman of Sareb emphasised that the improvements in real estate indicators have not only been observed in the large (regional) capital cities; and he pointed out that, at a time of significant volatility on the stock market, properties represent a haven for “Spaniards”.

Finally, the Chairman highlighted the change that is happening in terms of the (property) investment (market), from sale to rental, which is leading to an increase in prices in that segment.

Original story: El Mundo

Translation: Carmel Drake