12 November 2018 – Expansión
Santander and Blackstone have reached an agreement whereby the US fund, through the real estate servicer Aliseda, has taken on the management of a portfolio of assets from Popular amounting to €5 billion, which Santander is retaining on its balance sheet. The portfolio includes real estate assets and loans linked to the retail segment and Santander is retaining ownership of 100% of the assets. They were left out of the transfer of Popular’s assets to Quasar, the joint venture that the bank and Blackstone launched last year.
Santander transferred the bulk of Popular’s damaged portfolio to Quasar (€30 billion gross, linked primarily to property developers), along with 100% of the share capital of Aliseda. Blackstone controls the management of Quasar and 51% of the shares and Santander the remaining 49%. The bank has this stake valued at €1.7 billion on its balance sheet.
“The assets under management have been classified into two different groups, to reflect their owner: the Santander Group portfolio, owned by Popular (and now absorbed by Santander) and the Popular portfolio, owned by Project Quasar 2017”, according to the annual accounts of Aliseda. Specific teams have been configured within the servicer to manage Santander’s assets.
As at June, the latest available disaggregated figures, the entity chaired by Ana Botín still had a portfolio of foreclosed assets amounting to €10.5 billion gross. They have been cleaned with €5.2 billion in provisions (48.9%), which brings their net value to €5.4 billion. Nevertheless, in September, it sold a portfolio of properties worth €1.5 billion to Cerberus. In addition, Santander has loans to property developers amounting to €5.7 billion. Of the total, €1.8 billion are doubtful balances, with a default rate of 32%.
Santander currently has agreements with three servicers (Altamira, Aliseda and Casaktua). It paid those three companies almost €460 million in management commissions last year.
Meanwhile, Aliseda, which is now controlled by Blackstone and Santander, has rescinded the syndicated loan that it signed in 2015. At the time, the funds Värde Partners and Kennedy Wilson owned 51% of the real estate manager’s share capital and Popular owned the remaining 49%.
Following the acquisition of Popular by Santander, the entity chaired by Ana Botón repurchased the 51% stake held by Värde Partners and Kennedy Wilson, as a step prior to the transfer of 100% of Aliseda to Quasar.
“According to the syndicated financing contract subscribed on 27 November 2015, the cancellation of the loan has been formalised, following the repayment of the principal and outstanding interest, and of the cancellation penalty for the overall amount of €266.03 million”, said Aliseda’s report.
The bank with the greatest share of the loan was Popular itself (33.33%), with an outstanding balance of €87.86 million at the end of 2017. Bankia, Santander, Sabadell and Bankinter, with shares of 10%, had outstanding balances of around €25 million each. ING (€24.3 million), Crédit Agricole (€23.3 million) and BBVA (€17.5 million) completed the group of banks in the syndicate.
The interest rate on the loan, conditioned on the debt ratio and the gross result of the company, was six-month Euribor plus a spread of between 2.75% and 3.50%.
Following the change of ownership of Aliseda and its senior management team, the servicer paid compensation for redundancies of €1.4 million last year. It also paid €5.64 million for a remuneration plan that granted certain executives the right to receive remuneration in the event of a change of control of the company.
Original story: Expansión (by M. Martínez)
Translation: Carmel Drake