A Swap from ING & CaixaBank: the Last Stumbling Block in the Sale of Santander’s HQ to AGC

27 July 2018 – Voz Pópuli

The sale of the company that owns Santander’s Ciudad Financiera is closer than ever to becoming a reality. The approval of the liquidation plan by a Madrilenian court set September as the deadline for offers. Nevertheless, there are still disputes to be resolved.

The main stumbling block now is a lawsuit in London against a swap (financial derivative) granted by five entities: Royal Bank of Scotland (RBS), CaixaBank, ING, HSH Nordbank and AG Bayerische Landesbank. The lawsuit, filed years ago, is based on a claim that RBS manipulated the interbank – LIBOR and Euribor – market. The lawsuit amounts to €800 million, given that the swap has cost around €90 million per year since 2008, according to financial sources consulted by this newspaper.

The discussion in Spain focuses on the fact that some of the creditors of Santander’s headquarters fear that the new owner of the company (Marme Inversiones 2007) will decide to shelve that lawsuit. It would require an agreement between the new Marme and the five banks party to the swap in exchange for renegotiating the derivative, which expires in 2023.

AGC’s offer

Those €800 million, if the process in London proves successful, could mean that all of the creditors recover their money. In particular, the original shareholder, the Brit Glen Maud, and the company Edgeworth Capital, owned by the Iranian investor Robert Tchenguiz, who took positions during the bankruptcy.

Other sources consulted indicate that there is a commitment from the main interested party in the Ciudad Financiera, the Arab fund AGC Equity Partners, to keep the Marme litigation case open.

Currently, the only offer on the table is the one presented by AGC in 2016 for between €2.5 billion and €2.8 billion, depending on the variables that are included. A year earlier, Aabar Investments, the owner of Cepsa, and Edgeworth, also submitted bids. But they were not accepted.

As we wait to see what will happen over the next two months, AGC leads the rest of the candidates to acquire Santander’s headquarters.

One of the possible counter-offers could come from Edgeworth, which negotiated a €2 billion loan with JPMorgan to participate in the liquidation plan. It also proposed that the company exit from bankruptcy without the need to be liquidated.

This operation would generate a sale with significant gains for the funds that entered the process by buying Marme’s debt from financial institutions. They include Blackstone, Canyon and Monarch.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

JP Morgan Negotiates €2bn Loan with Owner of Santander’s HQ

22 February 2018 – Voz Pópuli

There’s a new player in the complicated game of chess involving the bankruptcy and liquidation of the owner of Banco Santander’s headquarters, the Ciudad Financiera, in Madrid. One of the largest investment banks in the world, JP Morgan, is negotiating a €2 billion loan to unblock the bankruptcy proceedings, according to financial sources consulted by Vozpópuli. JP Morgan declined to comment about the rumours in the market. Market sources indicate that the loan has not been granted yet.

In this way, the US entity would support one of the shareholders, the company Edgeworth Capital, owned by the Iranian businessman Robert Tchenguiz. That banker is trying to get Marme Inversiones 2007, the company that owns the office complex, to emerge from bankruptcy without having to file for liquidation. To this end, it has asked Mercantile Court number 9 in Madrid to give it the green light to negotiate an early termination for payments with the creditors.

That is where JPMorgan comes in. Tchenguiz has managed to convince the entity to consider financing almost €2 billion, which would have to be used to repay all of the creditors, including several banks such as CaixaBank, ING, RBS and Santander itself, as well as funds such as GSO (owned by Blackstone), Canyon, Burlington, Värde Partners, Centerbridge and Monarch.

Many of these creditors, above all the funds that purchased debt at a discount, agree with Tchenguiz. But not the other shareholder, the British magnate Glenn Maud, who is preparing to make a rival offer, or Santander, which is leaning towards the proposal put forward by the Arab fund AGC.

Status of proceedings

After years of bankruptcy and hundreds of resources, the situation is closer than ever to being unblocked. In fact, the court has already given the green light to the liquidation plan for Marme Inversiones 2007. The problem is that two other parent companies, Delma and Ramblas, are still immersed in bankruptcy proceedings. A resolution is expected before the summer.

Unless there is a new legal war, all indications are that the financial situation of the owner of the Ciudad Financiera will be resolved this year.

Along with the proposal from Tchenguiz, the fund AGC and the consortium Madison-Maud-GCA are studying putting between €2.7 billion and €2.8 billion on the table for Santander’s headquarters, within the liquidation process.

Together with JPMorgan, Goldman Sachs is also positioning itself in this operation. It has been advising Santander for months on the solution that may be found to resolve the situation of its headquarters.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

The Bad Bank Sells Loans On Rental Buildings For €198 Million

08/08/2014 – ABC

A portfolio of 23 loans known as “Pamela” are guaranteed by some twenty residential properties located in the region of Madrid.

The Asset Management company arising from the restructuring of the Banking System (Sareb) has sold property loans for almost 200 million euros to various investment funds advised by Canyon Capital Advisors, according to a press release issued today by the entity.

Specifically, Sareb has sold a portfolio of 23 loans known as “Pamela” which are guaranteed by some twenty residential buildings with a nominal value of 198.2 million and which are used for renting and are located in the Madrid region.

According to the company, the sale of these loans, the repayments on which are up to date in some cases and not in others, represents “the largest wholesale transaction completed by Sareb in the year to date and of the largest since its creation.” According to Sareb, the trade represents “the gradual recovery of the sector and international investors’ interest in the financial and property market in Spain.”

Furthermore, it has indicated that “the loan sale transaction adds to the good results harvested in the land property sector, with Sareb’s recent transactions in the Crossover project for a value of 108 million euros.”

Original article: ABC
Translation: Aura REE

Five Funds Buy Debt of the Landlord of Santander

9/07/2014 – Expansion

At least five opportunistic funds bid for the seat of the next landlord of Banco Santander. Värde Partners, GSO (a fund of Blackstone), Centerbridge, Canyon and Monar have purchased around one forth of the €1.9 billion debt of Propinvest, borrowed for buying the “Ciudad Financiera de Santander”, the bank´s headquarters in Boadilla del Monte (Madrid). The present landlord voluntarily filed for the insolvency process.

Its main lenders were Royal Bank of Scotland (RBS), as well as CaixaBank, Deutsche Postbank, ING, Bayerische Landesbank, HSH Nordbank and Raiffeisen which lent €1.575 billion. Some of them decided to leave before the arrangements and sold the debt to these funds.

According to sources with knowledge of the operation, the convention between Propinvest and the creditors might not be drawn before 2015. One of the solutions is the sale of the “Financial City”.

Santander holds a pre-emptive right in such case, therefore the bank may recover the ownership of the property with a discount. Also, a proposal by the lenders to swap the debt for assets, converting them into new landlords of Santander is not ruled out.

The entity pays at least a €82 million rent each year, as per the latest accounts facilitated by Marme Inversiones 2007, a Spanish arm of Propinvest. The “Ciudad Financiera” spreads over 160 hectares with Santander´s headquarters taking over 400.000 constructed square meters, including a hotel accommodation, an information center, a kindergarden, sports facilities and a golf course. The sale-and-leaseback agreement was signed in 2008 for the next 40 years.

Apart from the vulture funds, also Robert Tchenguiz and Abu Dhabi fund Aabar Investments take part in the bidding.


Original article: Expansión (by Jorge Zuloaga)

Translation: AURA REE