Tag: Gesif

ECI Accelerates Sale Of 140,000 Doubtful Loans

10 April 2017 – Voz Populí

Financiera El Corte Inglés has selected three overseas funds as candidates to go through to the final round of its tender to award the first sale of doubtful loans in its history. The entity that is jointly owned by Banco Santander (51%) and El Corte Inglés (49%) has chosen Axactor, Cabot Financial and Link Finanzas as the finalists in Project Alexandria.

Through this process, Financiera El Corte Inglés wants to clean up the worst part of its credit portfolio, by selling off loans that it deems irrecoverable. Project Alexandria comprises 140,000 doubtful credits, mainly corresponding to loans worth €160 million.

This operation is generating a great deal of interest in the market, because to date, El Corte Inglés and its financing arm have not put any portfolios on the market. For this reason, the funds are all willing to pay a premium in order to begin to collaborate with the largest consumer finance company by volume of loans.

The three funds selected to participate in the final phase of the process are investors that have been operating in Spain for a while. They all have their own recovery platforms and they have a vested interest in making a name for themselves in this market.

Who are the candidates?

Axactor arrived in Spain two years go. It is a Nordic group founded by former directors of Lindorff, one of the largest platforms in this segment in Europe, which in Spain controls Aktua and provides services to Sabadell and BMN. Like its fellow group from Norway, Axactor arrived in Spain chequebook in hand and within a few months had purchased several portfolios plus the business and team at Geslico, the former subsidiary of Lico Leasing.

Cabot is also an international recovery platform, based in the United Kingdom, and with connections to Encore, one of the largest global groups, itself based in the United States. Cabot established itself in Spain a couple of years ago and made its break with the acquisition of one of the largest servicers, Gesif.

Meanwhile, Link Finanzas is another British fund whose interest in Spain dates back even earlier than those of the other two investors. Link has been purchasing portfolios in the Iberian market for years. Last year, it consolidated its international presence with the purchase of the last vestiges of BBVA’s consumer business in Italy, for €100 million.

One of these three investors will be awarded the first portfolio to bear the El Corte Inglés brand. They are expected to submit their binding offers, which could amount to €15 million – €20 million, after Easter.

The latest data from Asnet and the CNMV reveal that Financiera El Corte Inglés is one of the market leaders by market share and profit, given that in 2016, it earned more than €66 million. Besides this portfolio, there are currently more than a dozen portfolios in the market, from the main entities in the country, including: BBVA, CaixaBank, Bankia, Liberbank, Ibercaja and Popular, amongst others.

Original story: Voz Populí (by Jorge Zuloaga)

Translation: Carmel Drake

Lone Star Sells c.1,000 NPLs & 600 Foreclosed Homes To Cabot

3 April 2017 – Idealista

The loan management firm Cabot has purchased Project McLaren from the US fund Lone Star. The portfolio contains more than 1,000 non-performing mortgages worth €102 million and more than 600 homes with a combined appraisal value of €51 million, according to financial sources consulted by Idealista. The properties that secure the mortgages and the homes are primarily located in Madrid, Andalucía, Cataluña and the Community of Valencia.

Cabot, together with Link Finanzas, were the two firms that initially expressed interest in this portfolio, but in the end, the former has acquired the project for an amount that has not been disclosed.

On the basis of their appraisal values, the properties that secure the mortgages are located primarily in Andalucía (21%), Cataluña (21%), Madrid (15%), the Community of Valencia (12%) and the Canary Islands (10%). In terms of the portfolio of homes, they are primarily located in Andalucía (26%), Cataluña (21%), Madrid (12%) and the Community of Valencia (11%).

Lone Star has become one of the most active funds in the Spanish real estate market. Following its purchase of the real estate company Neinor from Kutxabank for €930 million, the fund now wants to become the largest property developer in the country. Neinor Homes debuted on the stock market last month.

Another important operation was Cabot’s purchase, together with JP Morgan, of a package of real estate loans from Commerzbank worth €4,400 million. That portfolio contained loans secured by high-quality assets such as the Zielo Shopping Centre in Pozuelo de Alarcón (Madrid) and the MN4 Shopping Centre in Valencia, as well as the Ritz and Gran Meliá Fénix hotels.

Meanwhile, Cabot Credit Management is the largest manager of unpaid debt in the United Kingdom and Ireland. In 2015, together with the fund Elliot Asesores, it acquired the platform Paratus, which specialises in the management of problem assets. Since last year, it has also owned Gesif, another platform specialising in debt management and investments in portfolios of problem loans in Spain. (…).

Original story: Idealista (by P. Martínez-Almeida)

Translation: Carmel Drake

Fortress Finalises Its Withdrawal From Spain

17 November 2015 – Expansión

Strategy / The US fund will close the sale of Paratus to Elliott and Cabot Financial this week. It will also complete the ERE affecting more than 50% of Lico Leasing’s workforce.

The opportunistic fund Fortress is continuing its withdrawal from the Spanish financial sector. The US investor is finalising the sale of one of its financial businesses in the country, namely, Paratus, a platform that specialises in the management of problematic banking assets, which Fortress has controlled since 2009.

According to several financial sources, the sale of Paratus will be signed this week with the fund Elliott Advisors and the British group Cabot Credit Management Group, owned by JC Flowers and Encore Capital, taking ownership.

Each of the investors will take over a different part of Paratus’ business. Elliott is most interested in the real estate division and in the team. At the beginning of the sales process – known as Project Coast and advised by N+1 – Paratus held loans amounting to €152 million, secured by 866 properties; 500 homes worth just over €100 million; and a team comprising 43 professionals.

Meanwhile, Cabot is interested in acquiring the unsecured loans, which Fortress is selling for €426 million. The British group is looking to build upon its recent entry into the Spanish market, following its purchase of the Gesif platform from Elliott.

In addition to this possible sale, Fortress is also reducing its exposure to the Spanish financial sector by conducting an ERE at Lico Leasing. At the end of 2014, this subsidiary of Fortress had 130 employees. Through the restructuring, the fund has got rid of the commercial divisions of Lico Leasing, its other major financial business in Spain, which it acquired from the savings banks just one year ago; this means that it will no longer capture any new loans.

Complex operation

Fortress will continue to manage Lico Leasing’s existing portfolio and will continue to operate Geslico, its subsidiary that specialises in problem loans. That company recently integrated two of Fortress’s other companies in Spain: Auxiliar de Servicios y Cobros and Gestión de Activos de Aragón.

Fortress’s commitment to Lico Leasing was cut short due to the time required for its approval – almost two years – and by the re-opening of the credit tap by banks following the measures introduced by the ECB.

The US fund will continue with its other activities in Spain, by providing financing to companies and the real estate market.

Original story: Expansión

Translation: Carmel Drake

Apollo, Oaktree & Elliott Buy 1,000 Homes & 5,000 Mortgages

7 July 2015 – Expansión

Overseas funds are becoming the new owners of banks’ problem homes and mortgages. In recent weeks, Bankia, BMN and Bankinter have all signed deals – or are close to doing so – to transfer almost 5,000 mortgages and 1,000 homes to five international funds.

According to financial sources, Apollo, Oaktree and Elliott have invested the most in the transactions, although the funds Chenavari and Ellington are also close to finalising agreements.

These sales could just be the tip of the iceberg, since many of the banks currently have divestment projects underway, with the aim of transferring more than 50,000 homes to large investors.

The largest transaction to have gained momentum in recent days is Bankia’s Project Wind – the portfolio contains 4,300 mortgages to individual borrowers and it will be sold to the funds Oaktree and Chenavari. This sale is just awaiting its formal signing and the investors are expected to pay between €250 million and €300 million for the portfolio.

New transactions

BMN has also finalised agreements in recent days, for the transfer of two portfolios. The first is Project Coronas, which contains 550 homes located all over Spain, but primarily in coastal (beach) regions. The US fund Apollo has acquired this portfolio for €16 million. It represents the fund’s first major purchase of this kind since it purchased 85% of the Altamira platform from Santander.

Moreover, the entity chaired by Carlos Egea (BMN) has also sold a portfolio of problem loans, including almost 500 mortgages, of which three quarters relate to individual borrowers and the remainder to SMEs. This project, known as Pampa, has been awarded to a fund that has so far had little presence in Spain: the US fund Ellington Management, which specialises in the purchase of overdue mortgages. This investor bought a small portfolio from Barclays in Spain a few years ago.

Meanwhile, Bankinter has closed the sale of 300 homes to the US fund Elliott. The portfolio was initially valued at €60 million. It is Elliott’s first property-related purchase; until now the fund had focused on the NPL segment through its Spanish platform Gesif.

With these kinds of transactions, overseas funds are looking to capitalise on their purchases of large real estate platforms, for which they have so far paid around €3,100 million.

With that in mind, the Spanish financial institutions have initiated the sale of other large foreclosed asset portfolios, such as Bankia’s Big Bang portfolio, with 46,000 real estate units. Sabadell and Popular will also sell portfolios of homes in the near future.

Besides the sale of mortgages and foreclosed assets, Spanish entities are selling large portfolios of loans to property developers and hotel debt, as part of their objective to continue divesting property from their balance sheets. Financial institutions such as Santander, BBVA and CaixaBank all have sales projects of this kind underway.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

Fortress Puts Its ‘Paratus’ Platform Up For Sale

29 May 2015 – Expansión

Project Coast / Fortress wants to dispose of one of its platforms, with 40 employees and a portfoliol of loans and homes amounting to €700 million.

(Photo: Michael Novogratz, Director at Fortress Investent Group)

Fortress, one of the first opportunistic funds to arrive in Spain has put up the ‘for sale’ sign over part of its business in Spain. The US fund has announced the disposal of its distressed debt management platform and of a portfolio of loans and homes amounting to almost €700 million.

The possible sale comes at a time when international investors are reviewing their strategies in Spain following the results of the regional and local elections. Even so, sources close to the transaction indicate that this deal was launched long before the election results were announced and that the fund remains firm in its commitment to Spain.

The investor has taken the decision after it completed the purchase of Lico Leasing from savings banks last year, with 500 employees and assets worth €600 million.

Former GMAC

Following this purchase, Fortress wants to sell its Paratus platform. The firm originated from General Motor’s former financing arm, GMAC. After being rescued by the US Government in 2008, GMAC – currently known as Ally Financial – sold its European business to Fortress, which represented the fund’s first foray into Spain. The fund started to purchase non-performing loan portfolios in Spain in 2009, and ended up managing a portfolio amounting to €4,000 million.

The opportunistic fund has engaged N+1 to advise on the sale of Paratus; several weeks ago the consultancy firm distributed information to potential investors regarding the so-called Project Coast. Following the first phase of the process, this week N+1 will announce which funds and platforms will go through to the final phase, which is expected to close at the beginning of July.

According to sources in the financial sector, this transaction is primarily targeted at overseas funds that want to establish a base in Spain. Investors such as Elliot – with Gesif -, D.E. Shaw – with Multigestión – and Cerberus – with Gescobro – have closed similar deals in recent years.

According to the information distributed by N+1, Paratus currently manages four asset portfolios and has two service contracts, which in total correspond to assets under management amounting to almost €1,000 million. The sale also includes the current team, comprising 43 professionals.

Almost €700 million of the loans and homes managed by Paratus will be transferred into the hands of the buyer. Of those, €426 million are unsecured loans without any kind of collateral; €152 million are loans secured by 866 properties; and another 500 homes are worth just over €100 million. Most of the real estate exposure is located in Cataluña, Andalucía and Valencia.

New strategy

Following this sale, Fortress will focus its strategy in Spain on Lico Leasing and on its subsidiary Geslico – where it recently undertook an ERE –, which render similar services to those offered by Paratus. Through Lico, the fund has a banking licence as a financial credit establishment, which was granted by the Bank of Spain in December 2014.

Fortress has altered its strategy in Spain after its failed attempts to buy a real estate subsidiary, such as Altamira and Aliseda, and to enter Sareb’s capital.

Following those endeavours, it completed its largest purchase in Spain, by purchasing debt in Realia amounting to €440 million, and since then, it has acquired small real estate portfolios and participated in the financing of indebted companies.

The fund in Spain is led by the banker José María Cava, founder of Gladia Capital and a former director of BBVA.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

The fund Elliott establishes a base in Spain after acquiring Gesif.

The hedge fund Elliot already has an operational base in Spain. This U.S. vulture fund, one of the most active ones in Spain in the last few months, has closed the acquisition of the recovery platform Gesif. The operation, closed in October, allows Elliot to have a local team to carry out new acquisitions in the next few months. The fund has analyzed the acquisition of NCG, although it will finally not participate in the bid.

Gesif is one of the five biggest companies within the recovery sector, with more than one million of default credits and 230 employees. Until now it was in the hands of several partners, like Daniel Villalba, a former member of the board at Abengoa and Vueling; and Melania Sebastián, a former executive at Caja Madrid, who will continue in the managing team. Gesif has grown at a faster pace since the recruit of Gonzalo Elejabeitia – a former executive at Vesta and Appollo – in charge of increasing the business with foreign funds. Elliott is one of the main funds in the world, with assets for more than 22.000 million Dollars. Its founder, the controversial Paul Singer, considered the creator of the vulture funds, has followed  the  operation  closely.  Sources  within  Elliot  explain  that  the  objective  of  the operation is to “increase the acquisition of portfolios and offer a service to other funds”.

Elliot had already entered the Spanish market: it acquired 1000 million Euros in default credits from Bankia and 300 million Euros in default credits from Santander. In all, Elliot would have paid around 50 million Euros for both portfolios.

The vulture funds have three ways to enter the Spanish market:

1)   From their headquarters in London or through a Spanish freelance, who charges for every closed operation.

2)   By hiring a local management company, such as Gesif, in order to recover the maximum amount of default credits.

3)   Through the acquisition of a Spanish firm, as Elliot has done or as the Norwegian Lindorff did with Reintegra, from Santander, or the German GFKL with Multigestión. This option means a greater bet for the country.

Source: Expansión