Sareb to Use FABs to Aid in Divestment Strategy

5 July 2019 – Richard D. K. Turner

Sareb and Värde Partners have joined together to create Árqura Homes, with the goal of building 17,000 new homes. The joint-venture is the first of a series of invetsments that will employ a financial instrument called a FAB. This financial instrument was designed six years ago to facilitate the sale of non-performing bank assets. The structure confers specific tax benefits, primarily reduced taxes on the sale of such assets.

Sareb is currently planning a number of such vehicles for selling different types of assets, including hotels, shopping centres, offices and homes.

Original Story: El Confidencial – Ruth Ugalde


Sareb Quarantines its €30bn Mega-Portfolio Entrusted to Goldmans For The Time Being

11 June 2018 – El Confidencial

The most important operation in Sareb’s history is going to have to wait. Despite the wishes of Goldman Sachs, the bank charged with leading the sale of €30 million in toxic assets, to formally launch the process before the end of June, the entity chaired by Jaime Echegoyen would rather be cautious and have everything locked down, and well locked down, before it gives the final green light to an operation of this magnitude.

Particularly, when its largest shareholders, the State through the FROB, has just experienced an unexpected change of Government. Although sources at Sareb insist that a firm date has not yet been set for this sale and that all of the work carried out to date has been preliminary, during the conversations that Goldmans held with interested funds before the vote of no confidence (in the Spanish parliament), it was understood that the process would begin this month, according to several sources in the know.

Nevertheless, the change in the political panorama, which has resulted in Pedro Sánchez’s appointment as President and Nadia Calviño as the Minister for the Economy, lends itself to prudence, to avoiding any rushed decisions and to allowing time for the new Government to analyse this operation. Above all, when one of the objectives of the PSOE’s economics team has, for months, been to conduct a thorough audit of Sareb to understand the real extent of the public debt as a whole, according to Voz Pópuli.

The sale of the portfolio entrusted to Goldman would allow Sareb to decimate its liabilities in one fell swoop and generate two years worth of revenues in a single operation. The question is at what cost, in other words, what losses would such a divestment generate, given that all of these sales are being undertaken at discounts that the bad bank is finding very difficult to bear.

In fact, in order to play in this league of major operations, Sareb has been analysing for months all kinds of formulae to reduce its losses. One way of mitigating the losses and achieving better offers is to share the ownership of the capital of the new company to which these toxic assets would be transferred, like Santander and BBVA have done in similar cases.

Another lever that has already been analysed is to take advantage of the FAB (Banking Assets Fund) – that Sareb created in its early stages, because that would provide the operation with tax incentives, or associate it with the servicing contract, which has been in the hands of Haya until now.

That “servicer”, which is controlled by Cerberus, manages all of the toxic property that Bankia transferred to Sareb, whose deficit was the largest, in absolute numbers, of the bank rescue, another important argument why the new Government wants to understand in detail the design and consequences of the Goldman operation before giving it the green light, or not.

What is happening with Ebro and the property development plans?

(…) In terms of the entity’s other two star projects: the search for a partner to promote €800 million in residential assets and the sale of a €10 billion portfolio baptised Ebro.

The former has two finalists, Aelca and Aedas, and looks to be on schedule for a winner to be selected ahead of the summer (…).

In the case of Ebro, Sareb’s decision to not go ahead with this portfolio responds to, amongst other reasons, the fact that some of the perimeter proceeded from Haya assets, which are the ones that make up the entire Goldman portfolio, and so a decision was taken to desist from this project to give priority to the Goldman deal.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Sareb Sheds Portfolios Worth Over €1 Bn In December

12/01/2015 – Cinco Dias

Sareb, Spain’s bad bank, took a good advantage of every day of the rest of 2014 and sealed some significant deals amounting to more than €1 billion.

According to a statement released by Sareb Friday, on December 31st it signed a transfer agreement on 39 non-performing, secured loans, known as portfolio ‘Aneto‘. Their par value was of €237 million and they were acquired by international investment tycoon Blackstone. KPMG and Ashurst advised on the transaction.

The portfolio is secured with 29 residential housing developments and plots situated mainly in the Valencian Community, Madrid and Galicia regions.

In parallel, the company chaired by Belen Romana (pictured) agreed to sell an office building housing Gallina Blanca in Plaza Europa Square, Barcelona, to Colonial.

The property of 4.869 square meters of office space and 68 parking spaces was acquired for a total of €10.4 million, in assistance of Aguirre Newman and Anticipa.

“The sales prove the bad bank is a dynamically operating business and its assets are popular in the market”, Sareb’s CEO Jaime Echegoyen pointed out.

“The deals reassure that the entity successfully fulfills the role given to it”, he added.

Sareb has said good-bye to the year 2014 by sealing several loan and property portfolios valued at over €1 billion. The deals include Project Agatha (a loan and real estate portfolio worth €259 million), Meridian (a €133 million loan package), Olivia (loans valued at €140 million) and Kaplan (loans to small and medium-sized developers of a par value of €234 million).

In the last weeks of 2014, Sareb has sold four office buildings included in the Banking Asset Fund ‘Corona’ for €81 million, it declared in a statement.


Original story: Cinco Días (by J. P. C.)

Translation: AURA REE

Investors Dash For Hotels & Offices

26/06/2014 – Expansion

Step by step, the optimism returns to the property sector. “Nowadays, the circumstances are totally different from how they were two years ago when the market recovery was predicted for 2020. There is a certain movement and the foreign capital flow permits the transactions to stand on a pre-recession level”, said Jaime Cabrero, president of Coapis (Spain´s General Council of the Association of Official Colleges for Realtors) during his speech at the 9th Real Estate Asset Management Summit organized by Unidad Editorial and sponsored by CBRE.

According to the expert, the recovery will arrive to large extend thanks to “Asian and US investors”. As an example Cabrero gave the recent acquisition of the iconic Edificio España in Madrid for €265 million paid by Chinese billionaire Wang Jianlin.

“Banks started to lend again. Prices have already bottomed-out in the residential segment but still some margin remains for the tertiary property”, he stated.

The most eye-catching revival has been observed in case of hotels and shopping malls, told Miguel Oñate, director of Magic Real Estate. “In these segments investors fight for the assets and prices went up. Foreign investment plays a crucial role in the transactions as its presence increases likeliness of return of Spanish investors“.

Two recently created vehicles constituted open doors to foreign equity: Socimis and Funds for Bank Assets (FBAs). The first, Spanish REITs, attracted mostly non-resident insititutional investors and national family offices. Right now, they dispose of around €4 billion intended for investment in hotels, office buildings and shopping centers in the downtowns of Madrid and Barcelona which could provide them with a €6 billion deleveraging.

When it comes to the FBAs, they were set up by Sareb to liquidate more risky assets with view to cooperation with professional international investors, e.g. hedge funds. At the moment, there exist only 5 or 6 FBAs.

According to the participants of the summit, Spain shall do its best to create breeding ground for the future investors because once the large funds presently actively purchasing in the country, such as Blackstone, will finish their investment in Spain, they will leave.


Original article: Expansión

Translation: AURA REE

Sareb´s FABs Arrived for Christmas

They have been long waited for, especially the Bull Project, but the three first Banking Asset Funds (FABs), the investment vehicle set up for Sareb, have been already registered in the National Stock Market Commission (CNMV).

On December 18th, four and a half month after finalizing the transaction betweeen Sareb and HIG Capital fund, the FAB 2013 Bull was entering in the CMNV´s registry, managed by Intermoney Titulización company. The Bull portfolio, valued at 100 million Euros, consists of 939 houses, 750 garage spaces and storage rooms and a commercial premises. Sareb holds 49% of it.

Two days later, the FAB Corona was registered and the Ahorro and Titulizacion chosen as its management companies. Oficially, the operation has not been completed. After reducing the number of assets, there will be four office buildings incorporated into the portfolio.

Finally, on December 30th, the FAB 2013 Teide was launched. On the same day Sareb transferred a portfolio to the Fortress fund valued at 146 Euros, consisting of more than a thousand residential houses together with garage spaces and storage rooms, buildings under construction, commercial premises and land. It will be also managed by Intermoney Titulizacion.

The Banking Assets Funds (FAB) are an exclusive investment vehicle of Sareb, created on basis of the Law 9/2012. They are groupins of assets and liabilities, put together as separate properties without legal personality, however they may infer rights and obligations.

(…) The assets of FABs are transferred, directly or indirectly by Sareb, just like other assets acquired by subrogation or transformation of the previous ones, apart from the cash, the deposits of the creditors, securities of fixed rents acknowledged to the official second hand markets.

The FAB´s liabilities are those to be transferred, the securities of any type they issue, any type of credits and loans, institutional investors´input (…), and the liabilities proceding from the FAB´s activity.

The securities issued by FABs may be admitted to negotiations and may be only divided among the professional investors with the minimum face value of 100.000 Euros. (…).

The information obligations of the FABs are comprehensive and must be presented to CMNV in the annual account statements, they shall publish on the website of the managing companies quarterly and annual reports, the audit of accounts and any other relevant information regarding assets and liabilities transfers.

Additionally, the fiscal system highlighted for the FABs obliges them to tribute with the Corporate tax rate of 1% and also applies to them as to the Collective Investment Institutions (IIC).

Regarding to the shareholders and investors of a FAB, if they contribute with the Corporate tax and have their permanent premises in Spain or they contribute to the IRPF, they are reffered to as partners in an IIC. The ones who contribute to the income tax of non-residents without a permanent premises in Spain remain extent.

Source: Inmodiario