Blackstone & Oaktree Compete For 5,000 Sabadell Homes

10 December 2015 – Expansión

Banco Sabadell is finalising what could be the largest block sale of homes by a Spanish bank in 2015. The Catalan entity is negotiating with the US funds Blackstone and Oaktree to transfer 5,000 rented homes, as part of Project Empire. Sources at the entity declined to comment on the operation.

Although there have been larger portfolio sales involving debt this year, all indications are that this sale will be the largest in the foreclosed asset segment, a space that only BMN and Bankinter have been active in so far in 2015. Popular considered it, but suspended its sale in the end and the portfolio sales that Bankia and Ibercaja currently have underway may be delayed until the first quarter of 2016.

Project Empire is an operation that Sabadell has been preparing for a long time and which has generated significant interest in the market. The 5,000 homes have a nominal value of €600 million. The fact that they are already rented out means that the most established funds in Spain have expressed their interest in them.

Such is the case of Blackstone, which owns the Anticipa platform – formerly CatalunyaCaixa Inmobiliaria – and which has purchased several bank portfolios. Meanwhile, Oaktree has unleashed itself as one of the major international investors in Spanish property, with the purchase of assets from Bankia, Ibercaja and FMS, the German bad bank.

Sabadell has reduced the volume of problematic assets on its balance sheet by €3,500 million since the start of 2014, down to €22,350 million by September 2015.

Original story: Expansión (by J. Z.)

Translation: Carmel Drake

Sareb Wants To Sell 4 Large Portfolios Before Year-End

19 November 2015 – Cinco Días

The fourth quarter of the year is usually the most hectic for any real estate business, but this year Sareb’s activity is off the scale as year-end approaches. On the one hand, this is because following the decrease in the rate of house sales to individuals during the year, the company is looking to benefit from the traditional retail boom that always happens in the final quarter.

On the other hand, it is because a new, and onerous, accounting circular has just been officially approved, and it will govern the results of the so-called bad bank for this year end, which means that, amongst other things, it has been forced to launch a race against the clock to re-appraise, and value at market price, at least half of the €44,000 million assets it still owns.

Moreover, because it is trying to at least partially alleviate both effects, Sareb is also preparing the relaunch of several macro-operations with large investors. Specifically, according to sources, it has launched the sale of four portfolios with a combined nominal value of €1,500 million.

All of the portfolios contain loans, which represent 80% of Sareb’s total burden, and those loans are secured by real estate assets as collateral. In this way, the purchasers of these packages, who will have the option of acquiring specific tranches in each case and not necessarily each of the portfolios in their entirety, may invest with the objective of trying to recover the loans or of enforcing them and repossessing the properties that secure them.

The first two portfolios, which have a combined nominal value of €800 million, comprise loans secured by unique assets as collateral, in other words, luxury properties or large buildings, which could lend themselves to being shared between a group of buyers.

The third portfolio, worth €400 million, contains loans secured by both finished homes and land. In this case, the portfolio could be sub-divided into tranches to allow various buyers to participate if they are interested in acquiring just one specific part of the portfolio.

Finally, the fourth portfolio has a nominal value of €200 million and comprises loans secured by hotels, warehouses and retail premises. As an additional feature, besides the loans in this portfolio, the package also includes certain physical assets, specifically some industrial warehouses that have already been foreclosed.

Although the sales prices that Sareb will obtain for these portfolios remains to be seen (the figure of €1,500 million represents the combined nominal value), market sources claim that the conditions in the market have improved and so the bad bank could well obtain good prices. Those same sources reveal that the most demanding international investment funds have reduced the size of their discounts from 20% of asset values to around 12%, on average.

Either way, Sareb’s objective is ambitious (…), given that the assets for sale in these portfolios significantly exceed the volume sold at the end of last year, when the bad bank divested portfolios worth €1,000 million to large investors. (…)

Original story: Cinco Días (by Juande Portillo and Ángeles Gonzalo Alconada)

Translation: Carmel Drake

Lar Completes €134.9M Capital Increase

10 August 2015 – Expansión

The Socimi Lar España has completed a capital increase for 19.9 million shares, representing 50% of its capital, with demand exceeding supply by 9.2 times.

According to the company’s report to Spain’s National Securities Market Commission (CNMV), Lar España Real Estate’s shareholders subscribed 98.49% of the new shares during the preferential subscription period.

The Socimi has issued the shares with a nominal value of €2.00 and a premium of €4.76, and so has secured additional funding of €134.9 million in total, which it has earmarked for further investment.

During the preferential subscription period and the period for assigning additional shares, requests were received to purchase 183.5 million shares, however supply amounted to just 19.9 million shares.

The new shares will begin trading today (Monday 10 August 2015).

Original story: Expansión

Translation: Carmel Drake

Blackstone To Buy €790M Of Property Loans From CaixaBank

22 July 2015 – Bloomberg

Blackstone Group LP is buying a portfolio of bad loans with a nominal value of €790 million ($858 million) from Spanish lender CaixaBank SA, according to two people with knowledge of the matter.

The debt is linked to newly completed residential units as well as land and homes under development, according to the people, who asked not to be identified because the deal is not yet complete. The sale of the portfolio, known as Tourmalet, is expected to close at the end of the week, the people said.

Spanish banks are seeking to sell off bad real estate debt that has weighed on their balance sheets since the financial crisis sparked a property crash. Lenders foreclosed on more than 70,000 homes in 2014 with Andalusia, Cataluña and Valencia hit the hardest, according to data from the National Statistics Institute.

The assets backing the CaixaBank debt comprise 88% residential property, 9% land and 3% commercial property, according to a sales document obtained by Bloomberg News. The assets are mainly based in Andalusia, Madrid, Castilla La Mancha and Cataluña, according to the document.

Blackstone, which is run by billionaire Stephen Schwarzman (pictured above) has become the largest private equity real estate investor.

Spokesmen for Blackstone and CaixaBank declined to comment on the deal.

Original story: Bloomberg (by Sharon R Smyth)

Edited by: Carmel Drake

BofA In Final Talks To Buy Hotel Loans From Bankia

27 May 2015 – Bloomberg

Bank of America Corp. is in final talks to buy loans with a nominal value of c. €400 million ($436 million) from Bankia SA, backed by hotels in Spain, said two sources close to the transaction.The loan package, called Castle, will likely be sold for less than the nominal value of the borrowings, said the sources, who asked not to be identified because the information is not public. They declined to elaborate on the size of the discount.

A spokesman for Bankia, Spain’s fourth-largest bank, declined to comment. An external spokeswoman for Bank of America in Madrid was not immediately able to comment.

Investors are targeting hotels in Spain as the economy recovers and the euro’s slide against a basket of currencies that include the pound encourages more foreigners to visit the country. A record 65 million tourists came to Spain last year, with the largest share, 15 million, coming from the U.K. In the first two months of 2015, spending by visitors rose an annual 8 percent to €6.6 billion.

European banks and asset managers plan to sell or restructure €70 billion of riskier real estate as they try to clean up their balance sheets, Cushman & Wakefield Inc. said in an April report. The region’s lenders, asset managers and bad banks such as Spain’s Sareb sold €12 billion of loans tied to property during the first three months of the year, Cushman & Wakefield estimates.

Original story: Bloomberg (by Sharon R Smyth)

Edited by: Carmel Drake

Sareb Will Issue €10,189m In Senior Notes On 9 Feb

30 January 2015 – Expansión

On 9 February, the Asset Management Company for Bank Restructurings (Sareb) will issue two sets of senior bonds amounting to €10,188.8 million in total, according to the Official Bulletin of the Commercial Registry (BORME) published today.

In its first appeal to the market this year, Sareb will make two issues, one amounting to €4,084.7 million and the other amounting to €6,104.1 million.

In both cases, the nominal value of the bonds will be €100,000 each and the interest rate will be three-month Euribor plus a spread.

The subscription period, for both issues, will run from 12:00 until 14:00 on 13 February and will terminate on 28 February.

Original story: Expansión

Translation: Carmel Drake