Sareb Recorded Turnover Of €5,000m In 2014

29 January 2015 – Cinco Días

Echegoyen strengthens his team with a man from Barclays

Jaime Echegoyen has made his debut as the Chairman of Sareb, following the surprise resignation of Belén Romana on Monday, by analysing the entity’s provisional accounts for 2014.

In a meeting on Wednesday, the Board of Directors estimated that Sareb will close the year will total revenues of €5,000 million and an EBITDA of €1,000 million.

The final figures will be subject to a ruling by the Bank of Spain, which has not yet published the definitive accounting regulations that will govern the bad bank’s results; it is expected to require that an extraordinary provision be applied to the company’s accounts.

Sareb’s turnover in 2014, as valued by the company itself in a statement, exceeded the amount recorded in 2013 by almost one third. This, says the company “shows the capacity” that it has “both to generate resources through the management and sale of its assets, as well as to assume the commitments of debt cancelation”.

Based on last year’s accounts, Sareb will have repaid €3,416 million of the debt issued to acquire its portfolio, i.e. more than the €3,000 million initially envisaged, of which €2,916 million has already been paid; the remainder will be paid in February. Moreover, the company has made interest payments amounting to €1,135 million on that debt.

Once this process has been completed, Sareb will have repaid €5,416 million of its debt, which has the backing of the state, in just two years.

“Sareb is fulfilling its main objective, which is to manage and sell its portfolio without generating higher costs for the taxpayer”, explained Jaime Echegoyen at the first ordinary meeting held by Sareb’s Board in 2015.

Almost €1,000 million of the total revenues related to the sale of 13 wholesale portfolios, primarily to international investors.

“Although we do not yet know the accounting framework that will be applied to our results in 2014, we can say that the company has achieved the objectives that were set for it last year, and has deepened its strategy for the generation of greater value from the portfolio”, said Echegoyen. “We have a highly skilled workforce that this year has managed more than 10,700 proposals from developers for example; furthermore, the gradual entry into operation of the new contracted servicers will allow us to improve efficiency and provide an increased commercial focus”, he added.

Echegoyen’s first appointment

In parallel, Sareb’s Board of Directors approved a proposal to strengthen its management team, which has lost six members, including Romana, in the last 14 months (in addition, three directors have been replaced).

Juan Ramón Dios Rial will now join as the company’s Director of Recoveries and Restructuring. He comes from Barclays, where Echegoyen was previously CEO.

According to Sareb, Juan Ramón has extensive experience in the management of risk and the restructuring of debt relating to the real estate business. The new director will take over the role currently held by Enrique Saiz, who will continue to collaborate with the company.

Original story: Cinco Días

Translation: Carmel Drake

Bankinter Places €1,000m in 1.1% Mortgage Bonds

28 January 2015 – Expansión

Bankinter did not want to pass up the opportunity to obtain financing in market conditions never seen before, thanks to assistance from the European Central Bank, and so yesterday it placed €1,000 million of mortgage bonds with a yield of 1.1%, 38 basis points above the mid-swap rate.

The entity has not conducted an issue of this type of debt since May 2013, when it placed €1,300 million of floating rate securities. Then it paid a spread of 250 basis points over Euribor (the reference rate for floating-rate issues).

These bonds were placed to more than 80 institutional investors in a little over two hours. The placement with international institutional investors accounted for 88.5% of the total amount.

The disbursement date is 5 February and the repayment date will be 5 February 2025. The issue was over-subscribed by 1.8x.

Bankinter engaged Barclays, HSBC, JP Morgan and Santander to conduct this 10-year mortgage bond issue.

In September last year, the ECB launched its third bond-purchase program to try and revive credit. Since then, Santander, Sabadell and BBVA have all completed secured bond placements.

Original story: Expansión (by Daniel Badía)

Translation: Carmel Drake

Romana Resigns As Chairwoman Of Sareb And Is Replaced By Echegoyen

27 January 2015 – Expansión

The Chairwoman of Sareb (the so-called ‘bad bank’), Belén Romana, voluntarily resigned from her post on Monday and the number two at the company, Jaime Echegoyen, the current CEO, has taken over as the Chairman of the entity.

Echegoyen was appointed on Monday by unanimous vote at an extraordinary meeting of the Board of Directors.

The Board considers that Echegoyen “is the right person to lead Sareb through this new phase, given his capacity for leadership, his experience and his professional and human qualities”.

Meanwhile, the body said that it regrets the personal decision taken by Belén Romana and highlighted the excellent job she has done as the head of the company. “Without her dedication, vision and leadership, it is hard to imagine how a few simple paragraphs in the BOE would have been transformed into the robust business reality that Sareb has become today”, it said.

The company recalls that in the two years since its creation, Sareb has fulfilled the initial objectives that the Chairwoman set out and has contributed “significantly” to the restructuring of the financial sector, the reactivation of the real estate market and the change in perceptions of international investors about the Spanish economy.

“Sareb has evolved from being a project agreed with the international authorities in the context of the clean-up of the banking sector, to become a fully operational company, which has generated turnover of almost €9,000 million during the period”, it added.

Furthermore, since Romana has been in office, Sareb has sold nearly 24,000 properties and has repaid 11% of its initial debt. “All of this has resulted in a saving of €7,400 million for taxpayers”, highlights the note.

New phase

Sareb will now be led by Echegoyen and “will collaborate with professional service-minded managing agents that have a strong alignment with the company’s interests. All of this will allow it to take full advantage of the incipient recovery in the Spanish real estate sector”, the company explained in a statement.

The new Chairman also thanked the board for the confidence it has placed in him: “I am fully committed to the new responsibilities I am taking on and am convinced that Sareb will continue to fulfil its mandate, as it has been doing to date”, he said.

Echegoyen, who has extensive experience in the financial sector, was appointed CEO of Sareb in February 2014. Under his leadership, the company has adopted a new organisational structure and has chosen new operators to manage its portfolio over the next few years. Before joining Sareb, he was CEO of Bankinter and Head of Barclays in Spain and Portugal.

Original story: Expansión

Translation: Carmel Drake

Cajamar Places €750m 7-year Mortgage Bond Issue

16 January 2015 – Expansión

Cajamar Caja Rural has placed an issue of seven-year mortgage bonds amounting to €750 million, maturing on 26 January 2022, according to a statement released by the entity, which reveals that the orders received for the issue have exceeded €1,200 million.

The placement price of the issue – whose initial aim exceeded €500 million – has been set at 90 basis points above the mid-swap, to give a fixed annual coupon of 1.25% and a yield for the investor of 1.359%.

The high demand for this placement, at both a national and international level, indicates the support that institutional investors are showing for the financial activity of Spanish cooperative banks, led by the Cajamar Cooperative Group, according to reports by the bank.

The underwriters of this issue are BBVA, Crédit Agricole, Barclays and SOCGEN.

Original story: Expansión

Translation: Carmel Drake

No Truce at the Mortgage War: 12 Banks Offer Differentials Below 2%

29/08/2014 – Cinco Dias

In September 2008, all banks consistently started to refuse the loans as they saw one of the greatest recession on the planet was looming. However now, six years later, liquidity circles in the eurozone are going stable so financial entities can return to lending. Commercial leverages of their offices hand out mortgages, including those with homes as collaterals.

Large majority of the entities offer interest rate differentials below 2% plus Euribor for 12 months, whereas less than a year ago they could not afford for less than 3%. Bankinter was the first to break the pattern with a 1.95% + Euribor mortgage last year.

The challenge was soon accepted by the rest of the banks and reached its fever peak in the last months. ING Direct, Barclays, Deutsche Bank, Sabadell, Liberbank and Unoe are among those that trimmed their differentials below 2%.

Since July, BBVA is the number one with its up to (or down to) 1.7% + Euribor loan (2.25% in the first year). Obviously, the final price will depend of the economical record of the client and the loyalty products they buy together with the mortgage.

Aside from the competitive Cajasurs credit found exclusively in Andalusia and Extremadura, BBVA is second to no one. However, the spread of Santander (1.89%) treads on its heels.

According to data gathered by the Ministry of Public Works, the surplus cash in hands of banks currently exceeds €100 billion in the euro zone and the fact that the property prices have fallen by over 30% since the 2008 peak are key for recovery of the real estate market. The number of new mortgage approvals has already risen by 19%, as per information published by the National Insititute of Statistics (or INE by its acronym in Spanish).

The fierce deleveraging process run by financial entities and the necessity to return to their traditional business also impulsed the improvement in lending. Official statistics start to confirm the new credit flow. According to Spains central bank, in June mortgages with a house as collateral represented more than €767 billion, though still much less than in 2008. Furthermore, the INEs information tells that in the same month, the average interest rate in mortgages was equal to 3.88%, compared with the 4.37% rate from May 2013.

At the new war on mortgages – although far away from the differentials of 0.3% seen in 2006 and 2007 – internet banking smooths its offers out as well. Even if the rates are similar to those proposed by classical entities (i.e. slighly lower than 2%), less loyalty products are required. Most sophisticated in this field turns out to be Evo Banco that cuts in the differential if the Euribor reference goes up. In the first year of the credits life, a customer pays a fixed rate and after the term the differential declines in line with Euribor. Thus, given that it was set at between 2% and 4%, the rate will shrink by 0.2%, in case of a 4% to 6% one by 0.4% and so on, and so forth.

 

Original article: Cinco Días (by P. M. Simón & V. Gómez)

Translation: AURA REE

Santander & Barclays Leave San Jose in a Hurry, Selling Their Debt Share With a 50% Loss

20/08/2014 – El Confidencial

Once again banks get out of one of the few real estate giants that survived the recession hit. This time, Santander and Barclays opted for selling the loans given to Grupo San Jose for about €225 million with a more than 50% discount to Bank of America Merrill Lynch. Allegedly, a vulture fund is involved in the acquistion.

Specifically, Santander has sold €190 million in debt, while Barclays €135 million. Both banks saved small percentages of their assets, assuming the rest as a loss.

It is said that BofA Merrill Lynch sounds out other lenders of the construction company in hope of buying their part of the total of the €1.63 billion indebtness (some financial sources claim the amount reaches €2 billion).

Popular is the principal lender of San Jose, waiting for payback of €500 million, followed by Novagalicia (now Abanca) to which the group owns €400 million. Furtermore, €100 million to BBVA and less than that to CaixaBank, Banco Sabadell, Catalunya Banc, Caixa Geral, Unicaja, Eurohypo, Ceiss, Caja3 and Kutxa.

The sale of debt by Santander and Barclays does not affect the refinancing negotiations which the San Jose Group carries out with its creditors.

In the first half of 2014, San Jose earned €57 million and lost €34.07 million, which is 14.8% less than in H1 2013. The firm explains a 63.4% fall in the Ebitda with ´rental and developer price adjustment on the market´.

 

Original article: El Confidencial (by Eduardo Segovia)

Translation: AURA REE

Barclays Considers Waiving the Sale of Its Spanish Business

3/07/2014 – Expansion

Barclays is weighting up the possibility of suspending the sale of its business in Spain and bring its important plan to an end – reduction of network to focus on service to medium-high and high income customers. The asking price was much lower than expected by the bank and it does not seem eager to accept the received non-binding offers.

The “plan B” forged by the exectuives of Barclays España assumes saving the Spanish branch but in much smaller size and betting for the clients that by now have not represented a big group. Thus, many offices would be closed and employees dismissed.

Moreover, they complain that the news on selling the affiliate caused a significant loss in the number of customers of the bank in Spain.

The British bank has gone so far in the plans that the bidders yet have not been given the sales books for analysis. Final sale excluded the investment, cooperative and private banking and the credit card segment.

 

Original article: Expansión (by Salvador Arancibia)

Translation: AURA REE

CaixaBank, BBVA & Sabadell Present Their Offers For Barclays España

13/06/2014 – Expansion

The game for the Spanish business of Barclays continues. Yesterday, the countdown for submitting non-binding offers started off. Allegedly, CaixaBank showed the “greatest interest” in acquiring the lot, next to BBVA, Banco Sabadell and Apollo fund.

In turn, the odds are low that Popular and Bankinter will attend the next stage.

In the nearest time, Barclays Capital will have to decide how many bidders will be let in the core data room of Barclays España.

The sale includes a €20 billion worth of assets, portfolio of 575.000 clients, €9 billion in deposits and €18 million net value of loans.

Banks are mostly attracted by high returns and large scope of properties in Madrid, whereas funds seek entering banking business with discount and grabbing the extraordinary portfolio of Barclays España.

 

Original article: Expansión (by J. Zuloaga)

Translation: AURA REE

San José Enters Default & Requests Aid to Avoid Liquidation

18/03/2014 – El Cofidencial

Current talk of the town is a difficult situation of Grupo San José chaired by Jacinto Rey, facing maturity of a €2.400 million debt for last few weeks. After not having met requirements, the businessman negotiates with lenders (…) to waiver a syndicated loan granted to him in 2009. (…).

The company has not paid interest commission of €6.4 million before January 21st this year. The deadline was set by 85% of the lenders. (…).

Moreover, apart from the €81.9 million original payment amount, San José will have to add the not-fulfilled obligations from 2013 that amass the debt up to €139.14 million, deadlined in April. (…).

The Group came to an agreement with Banco Popular that had delayed payment of €77 million last year. The next and the last step will be to redeem €1.181,4 million that becomes mature in 2015, up to €1.320 million in syndicated loan. The debt expands to €2.400 million if several marketing and financial discount lines (€244 million), confirming process cost (€105 million), construction guarantee (€510 million) and other liquidity lines (€222 million) are taken under consideration.

Except for Popular, other lenders of the Group San José are: Sabadell, Novagalicia and Barclays. (…).

The only hope for the company right now is the new insolvency law that allows delay of payment if at least half of the lenders accept the proposal. However, the banks could demand guarantees and seize the majority of the capital (60%), now in hands of Jacinto Rey. (…).

At the end of 2013, San José recorded a €155.2 million loss, by 60% greater than in 2012 and four times bigger than the 2011 figures.

 

 

Original article: El Confidencial (Agustín Marco)

Translation: AURA REE

Barclays to Sell More Offices

31/01/2014 – Expansion

 The bank announced yesterday the leave of Jaime Echegoyen, the CEO of the entity in Spain since 2011. (…). He will be substituted by Antonio Castro and Claudio Corradini.

The group pointed out that the bank´s restructuring has practically come to an end. Now the entity aims at focusing on clients of high-income and premium rents. 890 employees have already been dismissed and 160 branches deregistered, among which 146 offices have been closed and 14 sold to Caja Rural from Castilla – La Mancha.

Nonetheless, the financial sources claim that Barclays might keep reducing its retail network and sell more offices in lots similar to the one sold to Caja Rural. Barclays denies conduction of any operation right now, however some movement could be observed by the end of the year. (…).

 

Original article: Expansión

Translation: AURA REE