Tag: Lindorff

Sabadell Delays Completion of ‘Solvia Desarrollos Inmobiliarios’ Sale until May

28 February 2019 – El Confidencial

Banco Sabadell is finalising the sale of land from Solvia Desarrollos Inmobiliarios (SDIn) to complete its real estate divestment process with prices of between €900 million and €1.1 billion. The process began with more than 20 funds and property developers expressing interest. Analysts forecast that the Catalan entity will record gains of more than €200 million.

To this end, the bank chaired by Josep Oliu (pictured above, left), has already prepared a timetable. The entity has delayed the deadlines because it has taken longer than expected to receive some of the signed confidentiality agreements (NDAs). Now, the interested parties will have until 30 March to analyse SDIn and submit non-binding offers. The deadline for the subsequent period for the submission of binding offers will be 17 May.

In this way, Sabadell will have the second half of May to accept the winning bid, and then receive the corresponding authorisations to complete the divestment before July (…).

Analysts expect that the operation will be executed in the region of €1 billion, with a discount of 30% on the net asset value. Even so, that would result in capital gains from profits of more than €200 million, according to a report by Alantra, to which this newspaper has had access. In this way, the maximum quality capital ratio (CET1 fully loaded) would move towards 12%, approaching the 12.5% that the bank has set itself as a target for 2020 in its strategic plan. In December, the ratio amounted to 11.1%, well below the 12.8% from the previous year following the sale of toxic property and the problems with the integration with TSB.

The land has been valued at €1.3 billion by Savills Aguirre Newman and by the property developer SDIn itself (…).

Candidates include funds and property developers. Market sources point to Cerberus, Oaktree and Neinor homes as some of the leading contenders. The operation will require the buyer to become one of the largest real estate players in Spain (…).

In December, Banco Sabadell agreed the sale of its property developer Solvia to the Nordic fund Intrum for €300 million. Intrum is listed on the Stockholm stock exchange and is the owner of Lindorff and Aktua in Spain (…).

Original story: El Confidencial (by Óscar Giménez)

Translation: Carmel Drake

Lone Star & Cerberus Increase their Commitment to Spanish Property

21 February 2019 – Expansión

The need for the banks to reduce their exposure to property and the funds’ appetite for the Spanish real estate sector have converged in recent years leading to the transfer of portfolios of debt and foreclosed assets worth millions of euros. Blackstone, Cerberus, Lone Star, the Canadian pension fund (CPPIB), Bain, Axactor and Lindorff are the funds that have been behind most of the major transactions involving portfolios of bank debt secured by real estate collateral during that period.

Emilio Portes, Director of Quantitative & Risk Management at JLL for Southern Europe, said that, following a frantic 2017 when more than €55 billion was transacted, last year saw portfolios sold with a gross value of more than €45 billion (…).

In 2018, the indisputable star was Lone Star, which took control of a portfolio worth around €12.8 billion from CaixaBank. Specifically, CaixaBank sold that portfolio along with Servihabitat to a company called Coral Homes in which Lone Star owns an 80% stake. Cerberus was also active last year with the purchase of several portfolios from Sabadell, Santander and CaixaBank with a total gross value of €12.5 billion. Behind it, came CPPIB, Axactor, D.E. Shaw and Lindorff, according to data provided by JLL.

“The sum of the transactions recorded over the last two years exceeds €100 billion, which places Spain as one of the countries with the largest transaction volume in Europe and the most liquid in terms of real transactions”, says Portes. In those portfolios, there are various types of assets, mainly residential, but also land, offices, premises and hotels.

The year ahead

During 2019, the banks will continue to divest assets, although with smaller portfolio sales. “In 2019, we expect a transaction volume of €20 billion, in addition to whatever Sareb ends up doing”, revealed Portes. He explains that most of the large Spanish banks have now reduced their NPA (non-performing asset) ratios to below 5%.

Following the activity undertaken by the large banks, all eyes are now focused on the medium and small-sized entities, particularly those with the greatest property exposure and therefore most pressure, as well as on Sareb, which has assets worth more than €35 billion still left to sell (…).

The heirs of the banks’ property, having purchased at significant discounts, have an average investment horizon of five years before they undo their positions (…)

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Sabadell Puts its Property Developer Subsidiary Up For Sale with Assets worth €1.2bn

5 February 2019 – La Vanguardia

Banco Sabadell announced on Tuesday that it is putting its subsidiary Solvia Desarollos Inmobiliarios up for sale. The property developer owns assets worth around €1.2 billion. The assets are mostly plots of residential land, located in prime areas of Madrid, Barcelona and other major cities, as well as 130 work-in-progress real estate developments.

Less than a week ago, the President of Banco Sabadell, Josep Oliu, announced at the presentation of last year’s results that “we are going to continue with our asset divestment policy”. On this occasion, Sabadell has chosen the investment bank Rothschild, according to the relevant fact sent to the CNMV, to circulate the sales prospectus amongst possible buyers. According to market sources, large funds such as Blackstone, Cerberus, Värde and Oaktree, amongst others, may be interested in buying the company.

The entity, led by Francisco Pérez, has around 40 employees, who will also exit Sabadell’s orbit. The sales process may last six months. Firstly, the candidates will have to submit offers and then a competitive process will be carried out.

This sale is running in parallel to the sale of 80% of the real estate manager Solvia. In theory, an agreement has been reached to sell that firm to Lindorff Holding Spain, which belongs to the Swedish fund Intrum, for €300 million. That price may increase by an additional €40 million if certain conditions established in the sales agreement are fulfilled.

Original story: La Vanguardia (by Conchi Lafraya)

Translation: Carmel Drake

Aedas, Neinor & Merlin Properties Put €1bn on the Table for Sabadell’s Land

29 January 2019 – OK Diario

Banco Sabadell has now opened the sales process for Solvia Desarrollos Inmobiliarios, its real estate developer, for which the entity expects to obtain €1 billion. To date, the entity chaired by Josep Oliu has already sent the teaser to almost 30 interested parties. But there has been an important development, and that is that it is not only the typical funds that tend to participate in these types of auctions that are interested in the company, property developers are also keen, including Neinor, Aedas and Merlin Properties.

It is worth remembering that when Sabadell decided to sell Solvia, it separated the house-sale business and the real estate development business into two different companies with the aim of achieving a better offer. The land, which is owned by the second firm, forms part of the bank’s balance sheet and that is what is now up for sale.

According to sources speaking to OK Diario, the deadline for non-binding offers will finish in March; it will be after that when Banco Sabadell will start to receive binding offers. Sources in the know indicate that the operation will be closed in the second quarter. And, moreover, in addition to the aforementioned property developers, funds such as Cerberus, De Shaw, Blackstone, Värde, Apollo and Oaktree have also received the teaser (…).

The main plots of land owned by Solvia Desarrollos Inmobiliarios are in Madrid, Barcelona and several places along the Mediterranean Coast. The portfolio includes plots that the buyer will have to reclassify in order to be able to sell, resell or transform them, as well as plots that are ready for development. It is precisely in those assets that so many property developers have expressed their interest.

Banco Sabadell obtained a profit of €138 million from the sale of 80% of Solvia, its real estate subsidiary, to Lindorff, a company that belongs to the Intrum AB group, for €300 million. With that operation, Sabadell, which has retained ownership of the remaining 20% stake in Solvia, achieved a positive impact on its Common Equity Tier 1 (“fully loaded”) capital ratio of 15 basis points.

The completion of that operation, which is subject to obtaining the corresponding authorisations, is also scheduled for the second quarter of 2019 (…).

Original story: OK Diario (by Borja Jiménez)

Translation: Carmel Drake

Sabadell Puts ‘Solvia Desarrollos Inmobiliarios’ Up for Sale

19 January 2019 – El Periódico 

Banco Sabadell has launched the sales process of Solvia Desarrollos Inmobiliarios (SDIN), the company that owns the bank’s land and which carries out its real estate development projects in Spain. On Friday, the entity placed the sales brochure for the firm in the hands of possible buyers, including international real estate funds, such as Cerberus, Blackstone, Värde and Oaktree, amongst others, according to confirmation provided by real estate sources. The process, regarding which the bank itself has declined to comment, could go on until April. The time necessary for buyers to express their interest and conduct analysis of the company for sale.

The process to sell the development company is beginning just a month after the bank chaired by Josep Oliu completed the sale of 80% of its servicer – real estate manager – to Lindorff Holding Spain, a company that belongs to the Swedish fund Intrum, after it fought off competition from the funds Cerberus and Centricus, which were also bidding for the real estate subsidiary. In that operation, Solvia was valued at €300 million. The price corresponded to 80% of the stake in the company, which could be increased by a maximum amount of €40 million if certain conditions, relating to the performance of some of Solvia’s lines of business, are met. The completion of the operation is scheduled for the second half of 2019.

Maturity period

SDIN is in the maturity period for its sale, according to sources familiar with the operation. The firm has a stock of more than 300 buildable plots, which are worth around €1.2 billion and has almost 130 developments underway across different parts of Spain, with more than 5,000 homes under construction. The size of the portfolio of SDIN, which is led by Francisco Pérez (pictured above), places it in the second league in the sector ranking, just behind the listed property developers, led by Metrovacesa, Neinor, Aedas and Vía Célere. Only Sareb has more assets (…).

Original story: El Periódico (by Max Jiménez)

Translation: Carmel Drake

The Fund Centricus Enters the Bid to Buy Solvia

28 November 2018 – Expansión

A candidate with an exotic air about it has entered the auction for Solvia, the real estate subsidiary controlled in its entirety by Sabadell. The fund Centricus, which is headquartered in London but which has several Chinese and Japanese shareholders, has submitted a binding offer to acquire Sabadell’s asset management platform, according to sources familiar with the process.

Official sources at the bank preferred not to comment in this regard. Centricus wants to enter the Spanish market to compete with the large investment funds specialising in asset management, such as two of the other players interested in Solvia: Cerberus and Intrum, formerly Lindorff.

Centricus manages assets worth more than USD 20 billion and has worked together with the Japanese giant SoftBank to raise funds amounting to USD 100 billion at the international level.

Asian alliances

The British fund also recently joined forces with the Chinese companies China Merchants Group and SPF Group to launch a USD 15 billion fund to invest in technology companies.

Centricus, Cerberus and Intrum have all submitted binding offers for Solvia amounting to more than €300 million. According to sources close to the operation, one of the funds has even offered an amount close to the €400 million that Sabadell aspires to receive. The bank has awarded the mandate to divest Solvia to Alantra.

Sabadell activated the sale of its real estate platform after cleaning up €11.5 billion in toxic assets from its balance sheet. At that time, it preferred to not sell Solvia, like the majority of its competitors did, to try to maximise its revenues. The bank considers that the real estate platform has significant latent profits. Cerberus could be the favourite in the contest since it is now holding advanced conversations with the entity.

Natural buyer

The US fund is the “natural” buyer for Solvia, say financial sources. In fact, during the summer, Cerberus acquired two large portfolios of foreclosed properties from Sabadell (Challenger and Coliseum), with a combined gross value of €9.1 billion.

Sabadell wants to sign the sale of the real estate platform before the end of this year to have its balance sheet free of property remnants. Solvia manages 148,000 assets, with a value of more than €30 billion. In parallel, the bank has also placed up for sale its property developer subsidiary, Solvia Desarrollos Inmobiliarios. The completion of that operation has been delayed until the beginning of 2019.

Original story: Expansión (by R. Sampedro)

Translation: Carmel Drake

Cerberus Plans to Create a Real Estate Giant by Acquiring Altamira & Solvia

10 November 2018 – Expansión

Cerberus is increasing its commitment to the Spanish real estate market. The US fund is the favourite candidate to take over the reins at Altamira, the manager of property loans and foreclosed real estate assets currently owned by Apollo and Santander. Moreover, Cerberus is battling it out with the fund Lindorff (now Intrum) and other investors to purchase Solvia.

As Expansión revealed on 8 October, Apollo renewed its contract with the investment bank Goldman Sachs at the beginning of the summer and distributed the teaser (the sales document containing a general description) to potential interested parties to dispose of this asset for between €500 million and €600 million. Although it is not alone in the process, Cerberus is the candidate that has the best chance of acquiring that company.

But Cerberus is not going to settle for that asset only. Financial sources assure that the US fund is also bidding for Solvia, in a process in which it is also competing with Lindorff. The CEO of Sabadell, Jaume Guardiola, noted, during the presentation of the results on 26 October, the “good appetite” in the market for Solvia, “whose sale will close “soon”. He whereby confirmed the sale of Solvia Servicios Inmobiliarios (SSI) and Solvia Desarrollos Inmobiliarios (SDI). For the sale of SSI, in which it is being advised by Alantra, the bank hopes to receive up to €400 million.

Concentration of the market

If Cerberus ends up being the winner of both processes, it will become the clear leader of the servicer sector and a proponent of concentration between the servicers. These companies, created from the former real estate subsidiaries of the banks, have become some of the stars of the new real estate cycle.

Currently, almost all of the assets under management of the banks are in the hands of a few companies such as Altamira, Servihabitat, Haya Real Estate, Aliseda, Anticipa, Solvia and Divarian (previously Anida). These firms are mainly responsible for the management and recovery of debt and transformation of loan obligations into foreclosed real estate assets, as well as the sale and rental of assets.

If Cerberus ends up taking control of Altamira and Solvia, it will control almost 65% of the market for servicers, which will allow it to mark a differentiation in its strategy. Currently, the US fund controls Haya Real Estate, one of the large servicers with €40 billion in assets under management. Moreover, it took over the reins at Anida, which was in the hands of BBVA, and which manages €13 billion.

If it adds Altamira and Solvia to its portfolio, the volume of assets under management will soar to €138.9 billion, with a market share in the servicer segment of 65%. According to numbers managed by the consultancy firm Axis, the other two dominant funds are Blackstone, with Anticipa and Aliseda (also from Santander) and LoneStar, which controls Servihabitat after purchasing that company from La Caixa in the summer.

Other assets

In addition to the servicers, Cerberus is also the owner of the property developer Inmoglacier; the online estate agency between individuals Housell; and the debt recovery company Gescobro (…).

Original story: Expansión (by R.Arroyo and D.Badía)

Translation: Carmel Drake

Cerberus is the Favourite to Acquire Solvia for €300M

31 October 2018 – El Economista

The sale of Solvia, the servicer of Banco Sabadell, is heading into the final stretch. According to reports, the US fund Cerberus is lining itself up as the favourite to acquire that company, worth just over €300 million.

According to market sources, binding offers were submitted on Tuesday for Solvia Servicios Inmobiliarios – the firm responsible for marketing the assets – of which those presented by Cerberus, Intrum (the company resulting from the merger between Justitia and Lindorff) and that of another overseas fund stood out. In particular, the offer submitted by Cerberus is the favourite in the process, which is being coordinated by Alantra.

The entity has engaged Rothschild to find a buyer for its property developer.

In any case, according to the same sources, this transaction exclusively contemplates the sale of the management activity, and not the transfer of assets, which opens the door for Sabadell to obtain greater profits, unlike some of its competitors such as BBVA, which did sell its servicer (Anida) together with a portfolio of assets worth €13 billion to Cerberus, applying a discount to those assets. It is worth recalling, nevertheless, that the US fund closed the acquisition of a portfolio of assets (from the Catalan entity) for more than €3 billion in the summer.

This operation comes in a context in which the international investment funds are very interested in Spanish property, which is allowing the owners to sell at higher multiples. That, together with the requirements of the European Central Bank (ECB) to accelerate the sales of financial institutions to the real estate business, has created the ideal breeding ground for Sabadell to decide to sell this asset.

Moreover, this divestment is going to allow the financial institution to reduce the consumption of capital and, whereby, avoid penalties from the ECB. El Economista made contact with Sabadell, but the entity declined to comment on the operation.

It is worth recalling that the entity – in parallel to the sale of its servicer – has engaged Rothschild to find a buyer for its property developer (Solvia Desarrollos Inmobiliarios) and a portfolio of its best plots of land, worth €1 billion, according to Vozpópuli.

Original story: El Economista (by Araceli Muñoz)

Translation: Carmel Drake

Sabadell Could Receive up to €400M for Solvia

24 October 2018 – Expansión

Change of tack for Sabadell. The bank has put Solvia up for sale, its real estate subsidiary, which it owns in its entirety, to try to earn €400 million, according to sources familiar with the process. Sabadell has awarded the mandate to sound out offers to Alantra, although other investment banks may also be advising the entity. Sources at the bank preferred not to comment in this regard.

Sabadell has activated the sale of Solvia three months after cleaning up its balance sheet to remove €11.5 billion in toxic assets. At that time, it decided to go against the trend in the sector and not divest its real estate platform, taking advantage of the sale of the portfolios.

Sources at the entity defend that the real estate platform holds significant latent value.

Other sources in the sector estimate that a reasonable price that the bank could obtain for divesting this asset is €200 million. That figure is equivalent to four times its EBITDA, a reference that the market has used for the sale of the property management arms of Servihabitat (CaixaBank) and Aliseda (Popular).

Sabadell’s strategy of separating the sale of the two portfolios from that of Solvia is to maximise revenues.

As is typical in these types of transactions, the final price will depend on whether the management of future toxic loans, known in the financial jargon as NPLs, are included in the sale.

Appetite

Alantra has already received interest from three opportunistic funds. One of the best positioned is Cerberus, according to various financial sources. In fact, the US fund acquired two large portfolios of foreclosed properties (Challenger and Coliseum) from Sabadell in the summer, with a combined gross value of €9.1 billion.

The US fund’s Spanish platform, Haya Real Estate, could gain muscle with the operation to accelerate its plans to debut on the stock market. And it could also benefit from important synergies, given that it already manages almost €40 billion in assets.

Sources at the sector also point to Intrum, the new brand that the Norwegian fund Lindorff is operating under, following its merger with the Swedish firm Intrum Justitia, and a new international player that wants to enter the European market with this operation, whose name has not been revealed.

In theory, the deadline for firm bids for Solvia, through binding offers, will close this month. Nevertheless, Sabadell is already holding very advanced negotiations with a single fund to sign the sale of Solvia, according to sources in the know. Sabadell has been weighing up the sale of its real estate platform for months. Jaime Guardiola, CEO of the bank, admitted at the beginning of the year that it was considering putting it on the market in light of the appetite from the funds for real estate and these platforms.

Solvia manages 148,000 assets, with a value of more than €30 billion. Since 2015, the company has focused on the marketing of new build developments and has put more than 10,000 homes on the market. It has 36 franchises and 18 own centres, which together make 54 offices located all over Spain (…).

Original story: Expansión (by R. Sampedro & S. Saborit)

Translation: Carmel Drake

Project Galerna: Sabadell Sells €900M in NPLs to Axactor

29 June 2018 – Voz Pópuli

Sabadell has already completed the first phase of its investment plan. The bank chaired by Josep Oliú has agreed to sell a portfolio of non-performing loans amounting to €900 million to the Norwegian fund Axactor, according to sources at the funds involved in the process consulted by Vozpópuli.

The portfolio known as Project Galerna comprises mainly mortgage tails proceeding from CAM, which form part of the entity’s Asset Protection Scheme (EPA), and so the completion of the operation is conditional upon approval from the Deposit Guarantee Fund (FGD).

Loans that remain after the foreclosure of real estate credits are known as the mortgage tails. According to the sources consulted, the purchase of these types of assets – which tend to be fully provisioned (100%) by the entities, and so typically generate gains – tend to have discounts of between 95% and 97%, and so the offer from the Norwegian fund to acquire this portfolio could amount to between €25 million and €47 million.

In the bid to be awarded this unsecured portfolio, Axactor has fought off competition from other interested parties such as Lindorff and Kurk. The Norwegian fund arrived in Spain in 2015 and, at the end of 2017, purchased a portfolio of non-performing loans amounting to €436 million from Bankinter.

Sabadell’s macro-sale

The award of Project Galerna to Axactor, a process that KPMG is advising, represents the first step in Sabadell’s divestment plan, through which it is seeking to get rid of around €10.9 billion in non-performing assets before the summer.

As this newspaper already revealed, in addition to Galerna, the bank also has projects Challenger and Coliseum up for sale, operations that Alantra is advising, and which together contain €7.5 billion in foreclosed assets. Similarly, Project Makalu, which KPMG is advising, contains €2.5 billion in loans to property developers and SMEs.

Challenger is the only one of the four portfolios that is not subject to approval from the FGD. The other three are linked to CAM’s EPA and so their block sale would generate million-euro losses for the FGD, which will end up increasing its deficit.

Negotiations with the FGD

To avoid that, Sabadell – as well as BBVA – is negotiating with the FGD to transfer the portfolios to new companies created by the entity and the funds that they are awarded to. In this way, the losses would not be assumed until the new companies sell the assets in the market.

In order to offset these losses, Sabadell, as well as BBVA with respect to Unnim’s EPA, has offered the Deposit Guarantee Fund the option of assuming more than 20% of the losses of the EPAs.

Original story: Voz Pópuli (by Pepe Bravo)

Translation: Carmel Drake