Tag: D. E. Shaw

CaixaBank Nears Sale of Niseko Project

9 July 2019 – Richard D. K. Turner

CaixaBank is nearing completion of the sale of its Niseko Project to two U.S. investment groups, D. E. Shaw and Farallon Capital Management. The total portfolio of non-performing loans have collateral guarantees and a face value of approximately 670 million euros.  

Niseko Project is divided into two sub-portfolios, Hokkaido and Sapporo. Hokkaido, which consists of eight large loans, all with guarantees, is set to go to D. E. Shaw. The sub-portfolio has an estimated market value of about 200 million euros (€400 million face value). The second portfolio will go to Farallon Capital Management and comprises 100 smaller loans.

At the same time, the Catalan bank is putting a new portfolio, the Chamonik Project, worth another 500 million euros, up for sale.

Original Story: El Confidencial – Jorge Zuloaga

Project Olympia: CaixaBank Puts €800M Portfolio of Doubtful SME Loans Up for Sale

23 October 2018 – Voz Pópuli

CaixaBank is pushing ahead with its objective to clean up its toxic property. The Catalan entity is holding negotiations with large international funds to sell the largest portfolio of doubtful SME loans to go on the market to date, amounting to €800 million, according to financial sources consulted by Voz Pópuli.

The deal in question is Project Olympia, which CaixaBank wants to close before the end of the year. It includes loans with real estate guarantees granted to small and medium-sized entities.

This operation joins another that the group led by Gonzalo Gortázar has underway and which is in a more advanced phase, Project Orion, comprising €600 million also in doubtful loans to SMEs with real estate guarantees.

In total, CaixaBank wants to clean up almost €1.5 billion before the end of the year and whereby complete the macro-operation signed with Lone Star to sell almost all of its foreclosed assets for €7 billion. After transferring the homes and land, the only assets left to sell are the problem loans, which is exactly what the entity is doing with Olympia and Orion.

Candidates

Unlike with the sale of the foreclosed assets, the favourites to buy the Olympia portfolio are not large fortunes such as Blackstone, Cerberus, Lone Star and Apollo. In this case, intermediate funds are looking at the operation, such as Axactor, Bain Capital, Intrum and D. E. Shaw. The large funds are saving themselves for other operations underway and to close those already signed during the year.

In the case of Olympia, experts in the market calculate that CaixaBank could obtain around €250 million for this package of loans, whilst the price of Orion could amount to €200 million.

With all of these operations, the Catalan entity is expected to end up with a net exposure (after provisions) to real estate of around €10 billion, down from €20.2 billion at the end of last year.

Beyond the pressure from the ECB to follow this path, the strategy is key for the bank this year due to the closure of its current strategic plan. The lower its exposure to property, the greater the profitability of the entities, which is critical in the current environment.

Original story: Voz Pópuli (Jorge Zuloaga)

Translation: Carmel Drake

Project Makalu: Sabadell Puts €2.5bn Portfolio Up For Sale

21 March 2018 – Vozpópuli

Banco Sabadell is stepping on the accelerator to complete its balance sheet clean up as soon as possible. After months of negotiations with the Deposit Guarantee Fund (FGD), the Catalan entity has decided to place on the market its first large portfolio proceeding from CAM’s Asset Protection Scheme (EPA). In this way, it has distributed information to investors about Project Makalu, comprising €2.5 billion in assets from the former Alicante-based savings bank, according to financial sources consulted by Vozpópuli.

This operation comprises foreclosed assets and unpaid loans from companies and individuals covered by the EPA. It follows another portfolio that has been on the market for a few days, Project Galerna, comprising €900 million in non-performing loans.

KPMG is advising Sabadell on both operations, which together comprise assets and loans worth €3.4 billion.

The group chaired by Josep Oliu has been negotiating with the FGD for months to try to kick-start these operations. The aim is that they will be followed by two more portfolios taking the total value of the assets for sale to €12 billion and whereby reset the entity’s real estate calculator. The issue is not simple because the sale of these loans may generate a hole for the Fund that would impact the State deficit.

Strategic plan

The Catalan entity announced at the recent launch of its strategic plan in London that it maintains the objective of reducing its exposure to problem assets at a rate of €2 billion per year. With the sale of Project Makalu alone it would more than exceed that goal.

The bank held €15.2 billion in problem assets at the end of 2017, but the forecasts indicate that that figure will fall below €9 billion by 2020: €4 billion in doubtful loans and €5 billion in foreclosed assets. And that is without taking into account the divestments that are now being worked on with the FGD.

Project Makalu is the fourth largest portfolio of problem assets ever to be put up for sale by a Spanish bank, behind only Popular’s Project Quasar, amounting to €30 billion, purchased by Blackstone; BBVA’s Project Marina, amounting to €13 billion, acquired by Cerberus; and Project Hercules, amounting to €6.4 billion in mortgages from Catalunya Banc, which was bought by Blackstone.

Meanwhile, Project Galerna is similar to Project Gregal, which Sabadell sold less than a year ago to three funds: Grove, D. E. Shaw and Lindorff. That portfolio comprised loans linked to consumers, without real estate guarantees, which had already been fully written off, and so all of the proceeds from the sale were recorded directly as gains.

Precedents

Besides Gregal, Sabadell closed two other major operations last year: Normandy, comprising €950 million in property developer loans, which was acquired by Oaktree, and which also proceeded from CAM’s EPA; and Voyager, comprising €800 million, which was purchased by the largest pension fund in Canada.

The latest operation launched by Sabadell joins others recently placed on the market by Sareb, BBVA, Cajamar and Kutxabank.

Original story: Vozpópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Voyager: Sabadell Launches Sale Of €1,000M NPL Portfolio

2 August 2017 – Expansión

Banco Sabadell is accelerating the sale of the non-performing assets accumulated on its balance sheet during the crisis. In just three years, the entity chaired by Josep Oliu has managed to cut its doubtful loan balance in half, which means that it has divested non-performing loans amounting to almost €9,000 million since 2014. In this way, in June of that year, the bank held €17,386 million in problem assets on its balance sheet, compared to the current figure of €8,541 million, according to the accounts published last Friday.

This effort has been made possible by the fact that Sabadell has been one of the most active entities in the sale of debt portfolios in recent years (…). In the last few months alone, it has managed to divest almost €2,000 million through the sale of Projects Normandy and Gregal (…). In addition, the bank has just engaged Deloitte to sound out the market as to whether an appetite exists for another €1,000 million portfolio, known as Voyager.

Gregal and Normandy

Project Gregal contained non-performing loans amounting to around €800 million and was segmented into three sub-portfolios. The last one was sold this week to the fund Grove Capital Management, which has taken over a batch of doubtful loans granted to SMEs. The other two Gregal packages were awarded to D.E. Shaw and Lindorff (…).

On the other hand, at the end of July, the bank managed to definitively close the sale of the Normandy portfolio (€950 million) to Oaktree. That portfolio comprised loans linked to real estate developments and so the amount paid was much higher and is reported to have amounted to around €300 million, which would represent a discount of around 70% (…).

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake

Sabadell Reports €2,000M In Additional Revenues From Sale Of 2 Portfolios

26 July 2017 – Voz Pópuli

Banco Sabadell is improving its financial figures. The entity chaired by Josep Oliu has closed several divestments over the last few months that will allow it to report extra revenues of €2,000 million this year.

Through this, it wants to avoid the market from drawing comparisons between it and Popular, as happened with Liberbank before the prohibition against trading short positions was introduced. After a few nervous days for the whole sector, Sabadell’s share price rose by more than 5%, following the express rescue of Popular, and its bearish positions decreased.

The divestments have accelerated in recent weeks, with the sale of two portfolios of doubtful debts and of a reinsurance agreement with Swiss Re, as a result of which it has registered proceeds of almost €700 million.

In terms of its portfolios, Sabadell has signed the transfer of two in the last few days. On the one hand, it has almost completed the sale of Project Gregal, with a volume of €800 million, to three funds. That operation was divided into three sub-portfolios: one containing real estate loans to SMEs (€200 million), which was acquired by D. E. Shaw; another containing non-performing loans to individuals, which has been awarded to Lindorff; and another containing non-performing loans to SMEs, which has yet to be sold and for which Cabot, Intrum and PRA are currently competing, according to financial sources. Market sources estimate that Sabadell will receive between €100 million and €150 million for that operation.

Strategic objectives

In addition to Project Gregal, Sabadell has also signed the sale of €950 million in loans to Oaktree, as part of Project Normandy. That operation has been underway for almost a year but has not been signed until now due to (disagreements regarding) the small print. The US fund has paid around €300 million for that portfolio of loans linked to real estate developments.

With these two operations, Sabadell is pushing ahead with its goal to reduce its balance of problematic assets at a rate of €2,000 million per year, per its announcement during the latest update to its strategic plan.

The sale of its subsidiary in the United States will be more important for its capital (which currently stands at 12%), which was announced in March for a value of $1,025 million, with profits of €450 million. That operation is pending approval from the US administrative authorities, which could be granted this quarter.

The same can be said of the reinsurance of a portfolio of individual life-risk insurance, for which Swiss Re has paid €683 million, resulting in net revenues of €250 million for Sabadell.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake