Sareb Sells €625M in NPLs to Deutsche Bank & Oaktree

20 December 2017 – El Independiente

Sareb (…) is closing 2017 by completing two of its largest operations of the year, with the sale of two non-performing loan portfolios to two large international funds.

The German bank Deutsche Bank has been awarded one portfolio comprising €375 million in non-performing loans, whilst the US fund Oaktree is on the verge of acquiring another portfolio, containing around €250 million in NPLs. Both portfolios, known as Project Inés and Project Tambó, respectively, stand out as two of the largest transactions undertaken by the so-called bad bank this year, confirmed sources familiar with the deals to El Independiente.

Project Inés, which was initially put up for sale with a nominal value of €500 million and which has been closed with a smaller perimeter (€375 million), as tends to be the case, primarily comprises mortgage loans secured by collateral. Meanwhile, Project Tambó was placed on the market with a nominal value of €300 million and now seems to be closing at around the €250 million mark.

Sareb was constituted in 2012 with the mission of selling 200,000 real estate assets, proceeding from the banks, worth just over €50 billion.

Moreover, in July, it launched its channel for the sale of non-performing loans worth €400 million aimed at investors and professionals to boost the divestment of a proportion of its portfolio of financial assets. Its commitment is to proceed with the liquidation of the properties and loans that it has acquired, before November 2027.

To accelerate the process, Sareb plans to debut its Socimi Témpore Properties on the stock market at the beginning of 2018. The Socimi owns a selection of Sareb’s best rental homes, almost 1,400 properties in total, in the metropolitan areas of Spain’s large capitals and other areas with high demand for rental.

The Socimi’s debut will happen during the first quarter of next year, since, although Sareb has everything in place to start to trade and its original plan was to list the company by the end of 2017, its negotiations with the MAB, the alternative market where the Socimi will trade, are still on-going (…).

During the 9 months to September, Sareb sold a total of 13,796 properties, which represents an increase of 55% with respect to the same period in 2016. Of those, 7,855 related to owned properties and 5,941 were linked to loans (…).


Sareb’s total revenues as at September rose by 3.6% with respect to the first nine months of 2016, to €2.394 billion.

The company highlights that, given the composition of Sareb’s asset portfolio – 68% of which relates to loans linked to the real estate sector – the weight of revenues resulting from the management of loans is still more significant than those generated from the sale of properties.

Meanwhile, revenues from the management of loans decreased by 6.8% during the first nine months of the year, to reach €1.599 billion, primarily due to the lower interest charged and the reduction in loan repayments and cancelations as the portfolio is smaller than it was last year.

Original story: El Independiente (by Ana Antón)

Translation: Carmel Drake

Sabadell & Bankia Finalise RE Portfolio Sales To Sankaty

29 June 2016 – Expansión

Spanish banks and international funds are negotiating against the clock as they seek to close operations worth hundreds of millions of euros within the next few days. Entities have offers on the table for real estate assets worth almost €4,000 million. And some of them are expected to bear fruit today or tomorrow, so that they can be accounted for in the half-year results.

The negotiations are even more frantic than in previous years due to the slowdown caused by the electoral calendar, which caused opportunistic funds to be prudent with their offers. One of the most influential factors was the fear that Podemos would enjoy electoral success.

Now that the uncertainty (surrounding Podemos) has been resolved, Sabadell and Bankia have been particularly agile in reaching agreements.

Yesterday, the Catalan entity sold a portfolio containing €460 million of problem assets linked to property developers, as part of Project Pirene. The buyer is the fund Sankaty Advisors, a subsidiary of the US giant Bain Capital. Sources in the market estimate that the investor paid Sabadell between €150 and €200 million for these assets.

Dominant investors

Sankaty’s interest in Spain has not been limited to that portfolio, given that it is close to securing another deal that has attracted significant interest from other large international investors: Project Lane, sold by Bankia, comprising 2,500 homes worth €400 million. This is the first portfolio to emerge from the carved up Project Big Bang; the entity had wanted to sell all of its foreclosed assets together, but that plan was suspended at the end of last year. Sources expect to know whether this operation will go ahead within the next few days.

The sale of the other two asset portfolios that Bankia has on the market are proceeding more slowly: one contains non-performing mortgages – Project Tizona – worth €520 million; and the other contains non-performing property developer loans – Project Ocean – amounting to €400 million.

Sankaty expects the recovery of the Spanish real estate sector to go beyond Sabadell and Bankia’s portfolios, as indicated by the fact that it is one of the main favourites to acquire Project Baracoa, from Cajamar. That will be the first sale of bankrupt loans by a Spanish bank. In total, the rural savings bank is looking to get rid of €800 million of these types of loans, which account for 70% of all of its bankrupt assets. 85% of them are secured by real estate collateral.

Another operation that is generating significant interest is Project Carlit, launched by CaixaBank, through which the Catalan group wants to transfer €790 million of doubtful loans to property developers. The bid is in its final phase with two key favourites in the running: Cerberus, which according to sources consulted is “putting all of its eggs into one basket”; and the alliance between Goldman Sachs and TPG, two US investors who have joined forces in the past. The US fund D. E. Shaw is also through to the final round, but it has not participated in any operations in Spain for a long time and the market considers that it is less likely to win the portfolio.

CaixaBank has another major operation underway: Project Sun, through which it wants to sell 155 hotel assets worth almost €1,000 million.

Another one of the most active entities is Abanca, which recently sold €1,400 million in non-performing loans to EOS Spain and which will be negotiating the sale of €400 million property developer loans over the next few weeks.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Lone Star Becomes The Largest Property Developer In Spain

18 May 2015 – Expansión

Strategy / The US firm, which was one of the first investors to arrive in Spain, has become the largest owner of land in the country after purchasing the real estate arm of Kutxabank. It also owns loans relating to large hotels and shopping centres.

It is neither a vulture fund nor an opportunistic fund. Lone Star is a patriotic fund. That is the mantra repeated by Juan Pepa (pictured above) at every forum he attends. The 37-year old Argentinian, former polo player, is the head of Lone Star in Spain and Portugal, the private equity fund that last week took over the baton from Vallehermoso, Reyal Urbis and Martinsa Fadesa, to become the largest property developer in the country. “Opportunistic funds are patriots because there was a need to bring confidence to Spain and we did it”, explained Juan Pepa two weeks ago at a real estate conference in Madrid.

Last week, Lone Star formalised the purchase of Neinor, the real estate arm of Kutxabank, with assets worth €1,000 million. Of this amount, around €590 million correspond to homes that are finished or under construction. The rest relates to land, which will be added to other land acquired from banks and property developers (€300 million). The fund aims to promote more than 3,000 homes each year; this year it will invest €1,000 million on the purchase of land. But, who is this new property developer?

This private equity firm was created in 1995 by the Irish-American John Grayken. Since its creation, it has launched 14 funds with a total volume of $54,000 million. Its investments range from properties, to debt, to other financial assets.

In the case of the real estate business, Lone Star’s first investments focused on Canada, and so it became a global investor in 1997. It closed its first transaction in the Spanish market in May 2014. However, by that point, Juan Pepa and his team had already been studying the market for several years. The first in-roads were made between 2010 and 2011, with Pepa’s monthly visits to Spain. During his stays in Madrid, the director met with advisors and managers of large real estate companies and although the sector was at the peak of its crisis, he told them that he wanted to purchase assets in Spain. “He made offers for buildings under development and for companies, but none of those deals were closed, due to a lack of agreement in terms of price. The offers were aggressive”, explained one of the advisors who often works with the US fund.

In the end, Lone Star’s first transaction in the Spanish real estate sector was through debt. The company purchased a portfolio (called Octopus) in May 2014 containing non-performing loans from the bank Eurohypo for €3,500 million (two thirds of its nominal value). These loans were secured by numerous properties, including several shopping centres: the H2O in Rivas (Madrid); Zielo in Pozuelo (Madrid); Dolce Vita in A Coruña; MN4 in Valencia; and hotel debt, including the Ritz and Gran Melia Fénix, both in Madrid.

It was not its first bid for a real estate portfolio. In the summer of 2013, Lone Star was about to purchase the Bull portfolio, the first package sold by Sareb. In the end, the portfolio was awarded to the fund HIG, much to the upset of Lone Star’s managers.


For the management of its assets, Lone Star relies on a company called Hudson Advisors (also owned by the founder of Lone Star). Headquartered in Madrid, Hudson, “manages, administers and adds value” to the investments made by Lone Star. Between the teams at Hudson and Lone Star itself, the fund has more than one hundred employees looking for opportunities in the Iberian Peninsula, since the US fund is not only interested in Spain. In April, it bought the Lusort Vilamoura complex in the Algarve (Portugal) for €200 million.

After purchasing Neinor, Lone Star has joined its teams together in a single office building located on the Paseo de la Castellana in Madrid. The most senior executives from the US fund attended the opening, just a few weeks ago; as well as enjoying the party at the new headquarters of Lone Star in Spain, they also visited some of the assets that the fund has foreclosed from the Octopus portfolio.

The ambitious commitment by Lone Star has resulted in a revolution in the sector, which does not doubt that it will provoke a ‘pull effect’ on other international investors, which will start to see land in Spain in a different light.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Bankia Puts Property Worth €4,800M Up For Sale

6 May 2015 – Expansión

Project Big Bang / The financial entity has put a batch of homes, land and commercial buildings up for sale, with the objective of disposing of all of the foreclosed assets left on its balance sheet.

Bankia has decided to accelerate the process to divest its real estate assets with a ‘macro-transaction’ involving a large block sale. The financial institution has launched so-called Project Big Bang, which includes a portfolio of residential and commercial assets (including offices and shops), as well as land, worth €4,800 million.

The transaction is still in its very early stages, involving initial meetings with investors, but it will represent the largest asset sale process seen to date (excluding transfers of debt with real estate collateral).

The properties up for sale include assets that Bankia did not transfer to Sareb following its nationalisation, as well as foreclosed assets resulting from subsequent defaulted payments. Most of the portfolio corresponds to residential assets. Thus, of the €4,800 million assets that Bankia has included in the batch, €3,300 million related to residential properties at 31 March 2015. In total, the bank will transfer 38,545 residential units (flats, chalets, parking spaces and storage rooms), with a total constructed surface area of 3.6 million square metres.

Along with the €3,300 million of residential assets, Bankia is selling 4,938 commercial units worth €1,100 million.

Land at zero cost

The portfolio also includes 2,589 plots of land with a total surface area of 4.6 million square metres. This land has a value of zero, according to Bankia, having been fully provisioned.

The sale is being coordinated by Credit Suisse and KPMG. The transaction may be closed as a single deal or through the sale of several blocks. The sale value may also decrease from €4,800 million to a smaller amount, say sources close to the process.

Many of the large funds, including Blackstone, Lone Star and Apollo, have already expressed their interest in the portfolio. These investors will have to compete with Cerberus, which has a preferential right to examine Bankia’s real estate portfolio. This “preferential” arrangement forms part of the negotiations that the US fund has held with the Spanish entity in recent years. In 2014, Bankia transferred its Bankia Habitat business unit to Cerberus for a consideration of between €40 million and €90 million, together with the 400 professionals who work for the platform.

Last September, Cerberus joined forces with the Norwegian fund Lindorff to acquire some of the doubtful and substandard loans, plus those that had doubtful or substandard outlooks, worth €900 million, which the entity chaired by José Ignacio Goirigolzarri (pictured above) was selling, as part of the Somo transaction. In February, Bankia launched a campaign to accelerate the sale of its remaining properties.

The clean up

Project Big Bang represents the largest divestment initiated by Bankia to date in the foreclosed asset and doubtful debt segment. The entity chaired by José Ignacio Goirigolzarri has been one of the most active in this market, having transferred almost 80 portfolios containing problematic loans since 2013, with a nominal value of €10,000 million.

Initially, Bankia undertook these types of transactions due to necessity, since the restructuring plan agreed with Brussels compelled it to divest non-strategic assets amounting to €50,000 million.

Although it has now almost completed this plan, the entity has decided to ‘step on the divestment accelerator’ in 2015 in order to reduce its default rate and focus its resources on new productive assets that improve its financial results. As well as the foreclosed assets, Bankia is also currently negotiating the sale of problematic mortgages, property developer loans and hotel debt.

If it closes all of these transactions, the nationalised group would become the first entity to withdraw from the segments considered by the market as a burden to the sector.

Original story: Expansión (by R. Ruiz and J. Zuloaga)

Translation: Carmel Drake