Tag: portfolio sale

CaixaBank Will Save €550M Over the Next 3 Years from the Sale of its Real Estate

27 July 2018 – La Vanguardia

CaixaBank estimates that the sale of 80% of its real estate business to the US fund Lone Star will result in a cost saving worth €550 million over the next three years, from 2019 to 2021.

On 28 June 2018, CaixaBank announced that it had reached an agreement with Lone Star to sell it a portfolio of foreclosed assets comprising real estate assets available for sale as at 31 October 2017 and the real estate company Servihabitat, worth around €7 billion in total.

The CEO of CaixaBank, Gonzalo Gortázar (pictured above), highlighted today that the operation, which is expected to be closed at the end of this year or the beginning of next year, will allow the entity to clean up its balance sheet of the foreclosed assets accumulated during the years of the crisis and to improve profitability.

“We have managed to reduce the volume of harmful assets sooner than we had expected, before the new strategic plan comes into effect” for the period 2019-2021 that CaixaBank plans to present in November, according to Gortázar.

The director added that the operation with Lone Star will not generate “a significant result” for CaixaBank, although it will allow it to increase its future profitability, thanks to cost savings of around €550 million over the next three years, given that having real estate assets on its balance sheet has an associated operating cost.

The completion of this sale will result in the deconsolidation of CaixaBank’s real estate business, which will make it “the bank with one of the most healthy balance sheets in the Spanish market”, he said.

Original story: La Vanguardia

Translation: Carmel Drake

Solvia Acknowledges That it Will Have to Generate Value from Solvia “Sooner or Later”

27 July 2018 – La Vanguardia

The CEO of Banco Sabadell, Jaime Guardiola, has acknowledged that “sooner or later”, he will have to generate value from Solvia, highlighting the “great job” that the entity has done and how “proud” he feels of the servicer.

That was according to the bank’s most senior executive at the presentation of Sabadell’s half-year results, where he reported that the entity has recorded a net profit of €120.6 million, down by 67.2% compared to the same period a year earlier, due to the provisions recognised as a result of the reduction in problem assets and the migration costs of the platform of TSB, its British subsidiary.

“Solvia not only serves assets on the bank’s books but also those of other clients such as Sareb. Beyond its financial value, it has a great industrial value, with some great professionals with a very different profile from those in the banking sector”, he specified.

In Guardiola’s opinion, Solvia is one of the bank’s entities that has done “a great job”, and so if at any time this value were to be realised and recognised, then selling the asset could become an option, although currently, it contributes in a positive way to Sabadell’s accounts.

Recently, the entity chaired by Josep Oliu disposed of four portfolios comprising problem assets with a gross value of €12.2 billion, which were awarded to the funds Axactor, Cerberus and Deutsche Bank, together with Carval.

The day on which it announced the sale of the largest batch of assets, worth €9.1 billion, Sabadell reassured the market that Solvia would continue to form a critical part of the bank and would continue to provide integral management services of the real estate assets subject to the operation on an exclusive basis.

Original story: La Vanguardia 

Translation: Carmel Drake

Project Orion: CaixaBank Launches the Sale of Another €600M in Doubtful Loans

23 July 2018 – Voz Pópuli

CaixaBank’s divestment machine is not shutting down, even for a second. The entity led by Gonzalo Gortázar has just closed the largest real estate sale in its history, a €12.8 billion portfolio, which it has sold to the fund Lone Star, and it has already launched another new operation.

The latest deal is Project Orion, through which CaixaBank wants to transfer a €600 million portfolio of problem loans to opportunistic funds, according to financial sources consulted by Vozpópuli. Unlike on other occasions, the portfolio does not comprise loans to property developers but rather credits to small- and medium-sized entities (SMEs). The loans are secured by real estate collateral, be it property purchased by the delinquent SMEs or other property offered as collateral when asking for a loan for business activity.

Project Orion was launched a few weeks ago and is expected to be closed after the summer. Currently, interested parties are immersed in the non-binding offer phase.

From flats to loans

The former Caixa is placing this portfolio on the market to reduce its volume of doubtful assets, having eliminated its foreclosed assets from its balance sheet. The entity agreed with Lone Star the sale of €12.8 billion in flats, land and developments for €6.7 billion.

On Friday, CaixaBank presents its results for the first half of the year, which will show the first snapshot of the entity following the agreement with Lone Star.

In addition to that agreement, the entity sold a portfolio of €650 million in problem loans to Cerberus, as part of Project Ágora.

Following those operations, CaixaBank is left with €3 billion in rental homes and €13 billion in doubtful loans on its balance sheet, in net terms.

The market expects the entity to make another major divestment of doubtful loans over the coming months, by selling an even larger portfolio than Project Orion. With that, the Catalan entity would be in a strong position to launch its new strategic plan, which it will announce at the end of the year.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Sabadell Plans to Sell Another €2bn Portfolio This Year & Then Solvia Next Year

20 July 2018 – El Confidencial

It has fulfilled its objective. Banco Sabadell has managed to unblock a decade of real estate crisis before going on holiday, thanks to the agreement signed with Cerberus to transfer it €9.1 billion gross in toxic assets and the imminent sale of another portfolio worth €2.5 billion gross to Deutsche Bank.

Those two divestments, together with the sale of €900 million in loans agreed already with Axactor, according to Voz Pópuli, will allow the entity chaired by Josep Oliu to remove €12.5 billion gross in property from its balance sheet. But the bank still needs to undertake a second round of divestments in its strategy to completely finish unlinking itself from the real estate sector.

The Catalan entity still has around €2 billion in toxic assets on its balance sheet, a portfolio that it plans to quickly put up for sale with the aim of also removing it from its balance sheet before the end of this year or during the first half of next year.

Until then, Solvia will continue to manage those properties, something that it will also do with the portfolio sold to Cerberus, given that the transfer included an exclusive management agreement, as well as any assets that the bank forecloses in the coming weeks.

But that interest from the entity in maintaining the link to its real estate asset manager is brief and interested, given that Oliu’s ultimate objective is to also sell Solvia in the medium term.

In fact, several of the funds that bid for the €12.5 billion that Sabadell has just sold asked for Solvia to be included in the process, a request that did not end up being fulfilled for several reasons. On the one hand, due to the price offered, given that the almost €1 billion at which they were valuing the servicer was insufficient for the bank.

On the other hand, because Sabadell whereby retains an ace up its sleeve ahead of the likely consolidation that this sector is going to experience and the growing appetite that exists between real estate funds and private equity firms for the servicers.

Solvia

From that perspective, although Cerberus has not been able to acquire Solvia now, the fact that it has purchased the bulk of Sabadell’s assets, which are managed by that subsidiary, confers it an advantageous position with a view to the future sales process, which could be launched next year.

That option would allow the merger conservations that were held between Haya and Solvia in the past to resume; those negotiations never ended up bearing fruit, but they have remained in the sector’s imagination ever since.

Ahead of that potential marriage, the management contracts that both servicers have with Sareb will also be key, given that they condition their conversations in various ways.

On the one hand, the sum of these two servicers would result in a position of dominance over the bad bank’s assets, which may cause that entity to break one of the two agreements.

On the other hand, right now, question marks exist over both the renewal of Haya’s contract, the first one to expire, and the plans that Sareb has to accelerate the sale of all of its assets.

The entity chaired by Jaime Echegoyen had engaged Goldman Sachs to transfer the €30 billion in assets that comprise Haya’s portfolio, an operation considered to be the first of several similar moves with the portfolios of the other servicers.

Although the change of Government has left those plans up in the air, and as Sareb awaits to find out the new Executive’s strategy for its business, both Sabadell and Cerberus are also interested in gaining time and seeing how the horizon clears before making their next move.

Cerberus has valued the two portfolios that it has acquired from the bank at €3.9 billion. Their gross book value amounts to €9.1 billion, which means that the operation has been closed with a discount of 58%.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Bankia Puts €450M Rental Property Portfolio Up For Sale

27 June 2018 – Expansión

Bankia is going to start a sales process for a portfolio of rental properties with a market value of €450 million, reports Reuters, citing two sources familiar with the operation.

The entity chaired by José Ignacio Goirigolzarri expects the interested groups to present their non-binding offers over the summer, so as to finalise the process with definitive offers from September onwards, indicates one of the sources.

This portfolio of rental properties forms part of the €4.9 billion in assets and loans foreclosed during the crisis that Bankia is trying to eliminate from its balance sheet.

At the end of March, Bankia had a gross exposure of around €16.6 billion on its balance sheet comprising non-performing loans and assets. The bank’s objective is to reduce its non-performing assets by around €9 billion.

Original story: Expansión

Translation: Carmel Drake

Sabadell Considers Selling €1.8 bn Portfolio Whilst it Negotiates with FGD

1 February 2018 – Voz Pópuli

Banco Sabadell is preparing an artillery of divestments over the coming months. The entity chaired by Josep Oliu (pictured above) has been sounding out the market for several weeks now regarding the launch of what would be its largest sale of problem assets to date, worth €1.8 billion, according to financial sources consulted by Vozpópuli.

This operation, which still needs to be approved by the bank’s Board of Directors, would be the precursor to a mega-operation amounting to €12 billion that the entity is considering launching over the next few months, according to Expansión. Sabadell has three mandates granted to launch these divestments in 2018 with Deloitte, KPMG and Alantra.

Nevertheless, these sales have been held up by the Management Committee of the Deposit Guarantee Fund (FGD). The €12 billion that Sabadell wants to sell are precisely those covered by the Asset Protection Scheme (EPA) granted by the semi-public fund during the sale of CAM.

The Management Committee, whose members include bankers from some of Sabadell’s competitor firms, is questioning the sale of the €12 billion because of the hole it would cause in its own accounts. The FGD held equity funds of €1.6 billion at the end of 2016. The same thing is happening with BBVA. In that case, the FGD is considering whether to approve the accelerated sale of assets proceeding from Unnim’s EPA.

Two positions

This story is about two very different positions. On the one hand, Sabadell and BBVA want to bulk sell all of the problem assets that they inherited from the purchases of CAM and Unnim, respectively, in one go. In terms of the danger posed by the end of the EPA, they know that, like happened to Liberbank, when the guarantees end, the unsold assets will affect their capital ratios, by raising the denominator (APRs).

Meanwhile, the FGD is studying the impact that these operations may have and whether the contracts signed at the time allow such accelerated divestments.

Sabadell was one of the most active entities in the sale of problem portfolios last year, with the sale of Project Normandy to Oaktree and Project Voyager to the largest pension fund in Canada.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Liberbank Sells €602M RE Portfolio To Bain & Oceanwood

23 October 2017 – Expansión

Liberbank has signed a binding agreement for the constitution of a new company together with Bain Capital Credit and Oceanwood – one of Liberbank’s current shareholders with a 12.7% stake – to which it will transfer a portfolio of real estate assets worth more than €600 million.

Specifically, the entity will transfer real estate assets with aggregate gross debt of around €602 million, of which €180 million (40%) corresponds to land and work-in-progress projects; €80 million to tertiary assets; and €342 million to residential products, according to a report submitted by Liberbank to Spain’s National Securities Market Commission (CNMV).

As a result, Liberbank will hold a 9.99% stake in this portfolio of foreclosed properties, whilst Bain Capital Credit will hold 80% of the new company, and Oceanwood will hold the remaining 10.01% stake.

Bain Capital Credit will be responsible for managing the assets in the new company following the completion of the operation, scheduled for before 31 December 2017, once the terms of the agreement have been fulfilled. According to its reports, Liberbank held sufficient provisions as at September 2017 to cover the impact resulting from the sale of this portfolio.

In this way, taking into account the direct sales of gross debt relating to real estate assets amounting to €209 million that the entity undertook during the third quarter, Liberbank has “already” fulfilled its objective of reducing its exposure to real estate assets by more than €800 million during the second half of this year, which the entity revealed when it announced its capital increase.

During this year, Liberbank plans to sell more than €510 million in non-performing assets on the retail market and, whereby, reduce its exposure by more than €1,000 million. So far this year, that figure amounts to €1,045 million, excluding the direct sales forecast for the fourth quarter.

The bank led by Manuel Menéndez decreased its portfolio of non-performing assets by 29% during H1 and by December, that decrease will have increased to 43% in two years thanks to the operation signed with Bain and Oceanwood.

Through this agreement, Liberbank expects to achieve a non-performing asset coverage ratio (NPA) of 49% (…) a Texas ratio of 94% and a CET1 (fully loaded) ratio of 12.2% as at the end of September, including the transfer of assets and the capital increase approved by the General Shareholders’ Meeting on 9 October.

€500 million capital increase

A few weeks ago, Liberbank’s shareholders approved a €500 million capital increase, which the entity will launch following the presentation of its results for the third quarter, which will take place on Tuesday 24 October (…).

Original story: Expansión

Translation: Carmel Drake

Santander Engages Morgan Stanley To Execute Express Sale Of Popular’s Property

29 June 2017 – Voz Pópuli

Banco Santander does not want to waste any time with its sale of Popular’s properties. The entity chaired by Ana Botín has engaged Morgan Stanley to execute an express plan to get rid of the problem assets that it has inherited from its subsidiary, according to financial sources consulted by Vozpópuli. Sources at Santander declined to comment.

According to the same sources, the mandate does not outline the sale of specific assets, but rather it defines which would be the best solution: the rapid transfer of assets in large batches; the reactivation of Ángel Ron’s old idea of creating a bad bank (Project Sunrise); the transfer of assets to Testa and Metrovacesa; or taking things more slowly to benefit from the economic recovery.

It is about putting the real estate balance sheet in order and defining the best path for each asset type. But Morgan Stanley’s work, which is being led by its CEO, Juan González Pedrol, will not focus only on resolving Popular’s existing property puzzle. It is also meeting investors to get them to analyse assets and prepare bids.

The fact that Santander has already committed to a mandate of this calibre shows that it is not afraid of reducing the volume of problem assets, which amount to almost €50,000 million after the merger. That is something that investors would penalise in the event that those assets stagnated on the bank’s balance sheet. In that context, a few weeks ago, Botín committed to cutting Popular’s real estate exposure in half by 2019.

The person responsible for this task at Santander is Javier García Carranza, Deputy General Manager of the group and Head of Restructuring, Real Estate, Investments and Venture Capital. García Carranza joined Santander from Morgan Stanley, where he used to be responsible for Real Estate in London.

The mandate given to his former entity is one of the most sought-after in the investment banking sector, alongside the capital increase, from which Morgan Stanley has been ruled out. Names still in the running for that €7,000 million-operation include Citigroup and UBS, as global coordinators, and Credit Suisse, Deutsche Bank, Barclays, BBVA, HSBC and CaixaBank, according to Bloomberg (…).

Saracho’s plan suspended

One of the first measures introduced by Santander after it took control of Popular was to suspend the operations that Saracho’s team had set in motion. The former management team had at least two portfolios on the market (…).

Sources in the market expect Santander and Morgan Stanley to bring a large portfolio onto the market before the end of the year, given that there is a lot of demand from large international funds. The clean-up conducted during the merger, of almost €8,000 million, means that the group is ready for these operations.

Following the merger, Santander has accumulated problem assets amounting to €48,417 million, according to the latest official figures. Of those, €36,800 million come from Popular, with a coverage after extraordinary provisions of 66%, and €11,600 million from Santander, which before the merger held a coverage of 57%. That means that the new Santander-Popular entity has more assets than Sareb.

In addition, the group holds other investments, such as its stakes in Metrovacesa, Sareb and Testa Residencial, which, in the case of Santander alone, amount to €5,300 million.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Bain Capital Sells Bancaja Habitat’s Former HQ

14 March 2017 – Expansión

Activity is continuing in the Valencian real estate market, although this time, the deal is more symbolic than significant. The headquarters of what used to be the largest real estate company and landowner in the Community of Valencia, Bancaja Hábitat, has a new owner. The US investment fund Bain Capital has sold the property located on Paseo de Alameda 7 in Valencia, which had been the operational headquarters of the former real estate subsidiary of the former savings bank.

Bain Capital took control of the commercial property, which has a surface area of 1,870 m2 spread over two floors, as part of a large batch of assets and debt that it acquired from Bankia in 2016. In turn, Altamira Asset Management had been entrusted to manage the property.

According to comments made by the real estate consultancy Inmoking, which participated in the operation as the marketer of the premises, the building has now been purchased by a Valencian investment group, whose identity has not been revealed. The new owner plans to look for a tenant for the premises, which are currently closed.

Catering and gastronomic businesses have proliferated in this area of La Alameda in recent years, which had been dominated by office buildings before the crisis. One example includes the recent opening of a Ginos restaurant by the Vips chain, on the ground floor of the La Pagoda building.

Original story: Expansión

Translation: Carmel Drake

Project Tour: Bankia Puts €166M Property Portfolio Up For Sale

3 February 2017 – Idealista

The banking sector is starting 2017 with a bang as it accelerates the sale of properties. Bankia has put a new real estate portfolio on the market – it does not contain debt, but rather comprises 1,800 properties, including finished homes, plots of land, retail premises, industrial assets and hotels. Known as Project Tour, the package is valued at €166 million.

Bankia is one of the most active banks at divesting real estate assets once again, as it seeks to focus on its pure banking business. It is a technique that has worked well for the banks in recent years and not just in Spain, but in other countries around the world as well.

In this case, so-called Project Tour is in the hands of the firm Alantra (formerly N+1) which intends to place this property portfolio (known by its initials in English as an REO) with international investors. Its value amounts to €165.9 million, according to financial sources consulted by Idealista.

The portfolio comprises 1,292 finished homes (it does not include any subsidised housing), 324 plots of land, 159 retail premises, 20 industrial assets and 9 hotels. None of the assets in the portfolio are rented or co-owned.

The properties are primarily located in the Community of Valencia, mainly in Valencia; Cataluña, mainly in Barcelona; the Canary Islands, mainly in Las Palmas; Madrid and Castilla y León (Segovia is home to most of these assets).

According to sources consulted by Idealista, Bankia expects to receive non-binding offers from a small number of investors by the beginning of February and binding offers by the middle or end of March. In this way, it plans to close the sale of the package during the month of March.

The entity chaired by José Ignacio Goirigolzarri (pictured above) is known as one of the most dynamic in the market: in 2016, it put several portfolios up for sale, including Project Ocean, a real estate loan portfolio worth almost €400 million, which was sold to Deutsche Bank; Project Tizona, a mortgage debt portfolio worth €1,000 million; and Project Lane, containing properties worth €288 million.

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

Translation: Carmel Drake