Sareb Offers the Contracts of Altamira, Servihabitat & Solvia to its Rivals

17 June 2019 – El Confidencial

Sareb is on a mission to change its course. According to market sources, the bad bank chaired by Jaime Echegoyen (pictured below) has decided to put its contracts with Altamira (owned by doBank), Servihabitat (Lone Star) and Solvia (Intrum) out to tender two years before their scheduled renewal.

Even though the contracts are not due to expire until the end of 2021, Sareb is putting them out to tender alongside that of Haya Real Estate, which is due to expire at the end of 2019. This represents a boost for Cerberus’s servicer, given that its competitors will now also have to focus on retaining their own contracts rather than just bidding for Haya’s.

In the event that Sareb awards the contracts of Altamira, Servihabitat and Solvia to other entities, it will have to compensate the servicers since their contracts clearly establish early termination clauses.

Altogether, Sareb is looking at putting out to tender the management of €34 billion in loans and properties that it still has left in its portfolio. The four will have to submit their bids in the next few months, specifying which assets they want to manage and what commissions they will charge.

The largest mandate is that of Haya, which manages assets proceeding from Bankia, which accounted for 37% of the bad bank’s original assets. It is followed by Altamira, which manages the assets proceeding from Catalunya Banc, BMN and Caja 3 (29% of the total); Servihabitat, which manages the assets from NCG Banco, Liberbank and Banco de Valencia (19%); and Solvia,  which manages assets from Bankia (foreclosed), Banco Gallego and Ceiss (15%). Clearly, there is a lot at stake for these servicers.

Original story: El Confidencial (by J. Zuloaga & R. Ugalde)

Translation/Summary: Carmel Drake

Ibercaja Finalises the Sale of a €600M Real Estate Portfolio

8 December 2018 – El Periódico de Aragón

Ibercaja is continuing to take steps to best position itself ahead of its stock market debut, which is scheduled for next spring. The Aragon-based bank wants to divest more real estate assets before the end of the year to clean up its balance sheet and improve profitability, an objective that it expects will materialise in the coming weeks with the sale of a portfolio of problem assets worth around €600 million, according to confirmation provided by the entity yesterday to this newspaper. To carry out this operation, which is called Project Cierzo, it has engaged the investment bank Alantra, which is finalising the negotiations to find a buyer.

The move by Ibercaja follows the widespread practice across the whole Spanish financial sector and forms part of its strategic plan for 2018-2020, whose goals include the aim of reducing its toxic property assets by half (doubtful and foreclosed) with the mixed sale of around €2 billion in land and housing. That would help to improve efficiency, by bringing it below 55%, and would make the entity more attractive for future investors.

During the period 2015-2017, the bank led by Víctor Iglesias (pictured above, left) managed to clean up €1.6 billion. At the end of the third quarter of 2018, the volume of problem assets amounted to €3.9 billion, which represented a decrease of 10.1% (€437 million) with respect to the same period last year and of 7.3% (€304 million) compared to the end of 2017 (€4.2 billion), according to the figures provided by the entity at the beginning of November. Based on those numbers, Project Cierzo – which was revealed by Voz Pópuli – would represent a significant step towards the objective of cutting the entity’s real estate balance in half by 2020, as there would be around €1 billion left to achieve that goal.

A month ago, Ibercaja announced that it had engaged the bank Rothschild, as an independent advisor for its stock market debut, a step that European legislation requires it to take before the end of 2020. Currently, the Aragon-based bank is controlled by the Fundación Ibercaja, which owns 87.8% of its share capital, a stake that must be reduced to below 50% to avoid a fine. The other shareholders are the foundations of three former savings banks –CAI, 4.85%; Badajoz, 3.9%; and Círculo de Burgos, 3.45%– which it absorbed when it purchased the Caja3 group in 2013.

The entity is working to ensure that its valuation is as high as possible, and so the specific date for the IPO will depend on the evolution of the market. Nevertheless, it is most likely that it will make the leap during the second quarter of 2019.

Original story: El Periódico de Aragón (by J. H. P.)

Translation: Carmel Drake

Ibercaja Sells 505 Property Developer Loans For €489M

10 July 2017 – El Periódico

On Friday, Ibercaja announced a sales operation that will allow it to significantly clean up its toxic assets. Specifically, the bank has completed the sale of 505 property developer loans and credits – most of which relate to “doubtful” assets” – amounting to €489 million. The size of this portfolio represents a decrease of 36% in terms of the total number of doubtful property developer loans that the entity held as a March 2017.

In this operation, known as Fleta, 43% of the portfolio comprises loans granted to finance land purchases, which represents “the highest percentage of such loans in an operation of this kind recorded in Spain to date”, said sources at the Aragon entity on Friday.

Moreover, the deal allows Ibercaja to bring its default rate below 8%, a figure that forms part of the strategy to optimise its balance sheet and provide a commercial boost, established in the entity’s strategic plan for 2015-2017.

Since the end of 2014, the year when the aforementioned plan was launched, the volume of doubtful loans has decreased by €1,103 million, in other words, to 57% of the initial volume.

The portfolio has been sold to the company Fleta Issuer Holdings Designated Activity Company, after a process in which “first-rate” domestic and international investors have participated “which reflects the interest received for the offer in the market”, said the bank.

On the other hand, Ibercaja has increased the financing of new real estate projects. In 2016, it tripled the number of homes it financed with respect to 2014. During those three years, it financed 150 new projects, most of which are located in Madrid, Barcelona and Zaragoza.

That milestone, add sources at Ibercaja, followed others that have been fulfilled in accordance with the strategic plan, which “is reinforcing the financial strength of the entity, driving the transformation of the business model and activating the geographical growth plans for the retail business”.

Financial operations

In March of this year, the entity considered the early repayment of all of the contingent convertible bonds (CoCos) issued by Caja 3 and subscribed by the FROB in 2013, amounting to €223 million.

Moreover, last October, the entity placed an issue of 7-year mortgage bonds amounting to €500 million on the capital markets. In July 2015, Ibercaja was the first unlisted entity to issue subordinated debt, amounting to €500 million with a 10-year term, since the start of the restructuring of the Spanish financial system.

A few months later, in October 2015, the bank closed an operation similar to Project Fleta, when it sold a portfolio of 428 property developer loans, mostly doubtful, for €698 million, in an operation known as Goya.

Original story: El Periódico

Translation: Carmel Drake

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

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

Sareb Owns One Third Of Spain’s Problem Banking Assets

17 September 2015 – Expansión

Sareb is playing a key role in the clean up of Spain’s financial sector. According to a study conducted by the consultancy RR de Acuña y Asociados, proof of that is the fact that it now owns one third of the sector’s problem assets.

The firm calculates that the Spanish banking system’s exposure to problem real estate assets amounts to €259,049 million in gross terms, plus a further €32,337 million in doubtful mortgage debt.

According to the study, which is based on the latest available figures, Sareb has loans and real estate assets worth €44,263 million, which in gross terms – before they were transferred – would have been worth €94,750 million.

RR de Acuña y Asociados also highlights that the transfer of assets from entities with public aid to Sareb meant that the first (entities) recorded extraordinary valuation adjustments of €12,700 million. The assets transferred by Bankia, Catalunya Banc, NCG Banco – now Abanca -, Banco de Valencia, BMN, Ceiss, Liberbank and Caja 3 had an initial appraisal value of €106,970 million. Excluding provisions, RR de Acuña y Asociados has identified a mismatch of €12,694 million between the transfer value to Sareb, which the entities must have borne themselves.

Forecast

Although the volume of problematic banking assets has stopped increasing over the last few years, the consultancy warns that it will take time for the entities to digest the leftover real estate assets: “Although the trend in the volume of doubtful assets is stable and is even recording some small downward variations, if we take into consideration the precarious financial situation of the property development and real estate construction companies, all indicators show that the level of exposed assets will continue to behave in the same way, for the next two years at least”, says the report. This means “a decrease in the volume of loans and an increase in the volume of real estate assets”.

As such, the real estate firm observes “an over-supply”, which means that it is “unlikely that house prices will begin to increase in the coming years”.

Meanwhile, yesterday, Sareb announced the repayment of a senior debt tranche amounting to €47.3 million after amending the asset transfer contract it holds with Catalunya Banc.

The asset transfer agreement between the two entities established that either of the parties could make adjustments to regulate the transfer completed in 2012, for a period of 36 months following its signing.

Original story: Expansión (by J.Z. and J.M.L.)

Translation: Carmel Drake

Altamira Completes Migration Of 28,000 Properties From Sareb

18 August 2015 – Expansión

Altamira has successfully completed the migration of 28,000 properties, which were originally transferred to the bad bank from Catalunya Caixa, Caja 3 and BMN.

In a statement, the company said that this operation has been carried out in three phases and has now been completed successfully, in accordance with the timetable agreed with Sareb.

The new properties incorporated into the platform carry ‘Sareb’s Seal of Assurance’ and expand Altamira’s offering, especially along the Mediterranean Coast.

The company has started to market the properties through its website. 30% of the homes are located in the province of Barcelona and the city of Barcelona itself accounts for 4% of all the residential properties for sale. With this operation, cities such as Zaragoza, Valencia, Sevilla, Málaga, Alicante, Murcia and Madrid “significantly” increase their respective supplies.

Following this migration, Altamira will have assets under management amounting to €55,000 million, making it “one of the leading companies in the sector in terms of size, with clear strengths in terms of its independence and its multi-client platform”, according to the company.

This operation strengthens Altamira’s strategy, which is based on diversification and growth. Until the end of 2014, the bulk of the company’s assets under management had originally come from Banco Santander, although it was also managing products from three other clients in the SME and financial asset segments, in which Altamira specialises.

In order to provide a better service, Altamira has developed a new technologically-operational multi-client platform, focused on the integrated real estate market and built around the company’s website, which has the capacity to manage a variety of assets, ranging from land, to new developments and second-hand properties.

Original story: Expansión

Translation: Carmel Drake

Altamira Obtains More Than €500M Of Financing

16 June 2015 – Expansión

Altamira Asset Management has just signed an agreement with a syndicate of 12 domestic and international banks to renew its financial structure and obtain financing of more than €500 million.

This operation forms part of the company’s strategy for growth and diversification, as it aims to position itself as one of the major independent and multi-client operators in the sector for the management of financial and real estate assets.

In fact, Altamira has just begun the process to migrate assets with a total value of €29,000 million from Sareb into its portfolio.

The portfolio awarded to Altamira for seven years comprises 44,000 properties and loans (to property developers) originated by Catalunya Caixa, BMN and Caja 3, for which Sareb disbursed around €14,000 million. By taking on these assets, Altamira doubled the value of its portfolio of assets under management and became the industry leader with a portfolio of total assets that exceeds €55,000 million.

Compared with a year ago, the company has increased its volume of assets under management by 113% and has started to manage portfolios from six different clients. In summary, it has significantly grown and diversified its client portfolio.

Santander closed the sale of 85% of Altamira to the US fund Apollo in January 2014, for €664 million. The bank retained the remaining 15% stake in the asset manager.

The operation involved the transfer of 500 employees from Santander to the new Altamira platform, although the annual accounts for 2013 only reflected the movement of 272 people: 183 from Santander, 60 from Altamira Santander Real Estate, 7 from Reintegra and 22 from Elerco.

Apollo hired the former Director General of Citi, Julián Navarro to lead this project; he joined Altamira as the CEO. The presidency is reserved for Andrés Rubio, the partner assigned by the US firm to design the strategy in Spain. This banker has led transactions such as the purchase of Evo Banco and Altamira.

Original story: Expansión

Translation: Carmel Drake