Cerberus In Exclusive Negotiations With BBVA To Acquire €2,000M Portfolio

22 September 2017 – El Confidencial

The operation in question is called Project Sena and it is the most important portfolio that BBVA has put on the market to date. With a volume of toxic real estate assets worth €2,000 million, primarily comprising NPLs backed by residential collateral, the entity chaired by Francisco González is holding exclusive conversations with Cerberus, according to several sources in the know. Both the bank and the fund have declined to comment.

Nevertheless, the US fund’s appetite goes much further and extends to include the real estate company Anida, which could end up forming part of the transaction as well. That would result in the second largest real estate divestment to be undertaken by a Spanish entity this year, following the sale of €30,000 million in toxic assets agreed between the new Santander-Popular and Blackstone.

The negotiations between Cerberus and BBVA date back to last summer and are currently at a critical point, in terms of tilting the balance one way or the other. Options on the table include Cerberus acquiring Sena on its own, adding Anida into the mix, or acquiring the former and entering the process to compete for the latter, a decision that could be taken at the next meeting between the entity’s Board of Directors.

As El Confidencial revealed, the idea has been floated at La Vela (BBVA’s headquarters in Madrid) of selling Anida to accelerate the real estate unblocking that the Bank of Spain itself is encouraging all the entities to undertake. In fact, BBVA has engaged PwC to advise it on the operation, and it is open to receiving different offers.

In its favour, Cerberus has the advantage of being in pole position to acquire Sena, a card that it wants to play in its favour to also bid for Anida. Nevertheless, other investment giants, such as Lone Star and Apollo, may also be interested in acquiring the real estate firm, a giant with gross assets of more than €5,000 million and the heir, along with others, of the former fund BBVA Propiedad, which the bank practically rescued at the end of 2008, when the first signs of the crisis emerged.

The net real estate exposure on BBVA’s balance sheet amounts to €8,750 million, according to the bank’s most recent half-yearly accounts, thanks to high coverage levels, which amount to 57% on average, one of the most conservative figures in the sector.

With a strategy clearly aimed at divesting real estate, in the last year, BBVA has undertaken several major operations, such as the sale of its Boston and Buffalo portfolios, the transfer of 1,500 homes to Testa, whose gross value amounts to €485 million and the transfer of land worth €431 million to Metrovacesa. Moreover, alongside Santander, BBVA is a shareholder of Merlin Properties, the largest Socimi in Spain.

After all these movements, the largest pawn currently in play is Anida, which also includes a property developer division, Anida Desarrollos Inmobiliarios, and several subsidiaries that the bank has been gathering up under the same umbrella, such as Anida Operaciones Singulares and subsidiaries in Mexico and Portugal.

In theory, the overseas units would be left outside of the real estate company sales process that is currently on the table, an operation whose final outcome is regarded in the market with as much expectation as concern, given that in the past, the entity has received several expressions of interest for Anida that have never ended up materialising.

But now the panorama has changed, given that the operation between Santander and Blackstone has put pressure on the rest of the sector to make similar moves, and the entities are increasingly more inclined to accelerate the divestment of their real estate.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

BBVA Puts Its RE Arm Anida Up For Sale

6 September 2017 – El Confidencial

A new major real estate transaction is on the horizon: BBVA has announced that it is analysing the sale of its servicer Grupo Anida. The real estate specialist is a giant in its own right, with gross assets of more than €5,000 million. BBVA is looking to take advantage of the appetite from large international funds to acquire a ring-side seat in the recovery of the Spanish market.

According to four sources in the know, the plans of the entity chaired by Francisco González are to focus on completely divesting this subsidiary, which accounts for just a proportion of the €8,750 million of net real estate exposure on its balance sheet. BBVA has declined to make any comments.

Nevertheless, last Thursday, the bank itself acknowledged in its results for the first half of the year, that its objective for the whole area known as Non Core Real Estate, which includes Anida, is “to accelerate sales and reduce stock, with specific actions for those products that have been on the balance sheet for the longest”.

Grupo Anida is the heir of the former fund BBVA Propiedad, which the bank practically rescued at the end of 2008, when the first effects of the crisis swept away these types of vehicles, a crisis that the entity averted by investing €1,600 million to continue as the sole shareholder and provide an exit for its other investors.

The bank also owns a property developer division, Anida Desarrollos Inmobiliarios and various subsidiaries that it has been accumulating under the same umbrella, such as Anida Operaciones Singulares, and subsidiaries in Mexico and Portugal.

According to the latest audit report, corresponding to the year 2015, the real estate company has managed to reduce its losses by 36%, to €311.4 million. But, since the publication of those accounts, BBVA has completed some major transactions, such as the sale of the Boston and Buffalo portfolios, and the transfer of 1,500 homes to Testa, whose gross value amounts to €485 million; and the transfer of land worth €431 million to Metrovacesa.

But, even after all of these moves, the entity is now willing to serve the main dish in the form of the sale of Anida, whose potential purchasers include some of the funds who expressed their interest in the sale of Popular’s toxic assets, such as Apollo and Cerberus, not to mention firms such as Bain, which expressed its interest in Vía Célere in the past, according to the sources.

For BBVA, closing an operation of this kind would represent the cherry on the top of almost ten years of hard work, a period during which the entity decided to follow its own strategic approach, setting itself apart from the market trend, by opting to retain the bulk of its property on the balance sheet rather than sell it badly.

The entity has been able to maintain this policy thanks to it high provisioning levels, one of the most generous in the finance sector, given that the average coverage rate of its entire real estate exposure, including live and foreclosed property developer loans, amounted to 57% at the end of the first half of this year.

The sale of Anida will, therefore, allow it to release the bulk of the provisions linked to those assets and take advantage of the soaring appetite from the large international funds to own a large real estate platform through which to try to benefit from the recovery in the market.

Nevertheless, any happy ending in this regard will always be dependent upon the thorny matter of price, a stumbling block that has caused the entity to reject several offers for Anida in the past.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

BBVA Finalises Sale Of Torre Puig To Grupo Puig

22 May 2017 – BBVA

BBVA has finalised the sale of Torre Puig to Grupo Puig, one of the largest real estate operations in Barcelona. The sales prices is reportedly in line with pre-crisis levels.

The property is a tower located in Hospitalet de Llobregat, one of the largest real estate expansion areas. The building has 21 floors and covers a surface area of 14,300 m2. The Grupo Puig has occupied the property to date.

The building was constructed by the former Catalunya Caixa (CX) for the perfume group Puig. The building was designed by architect Rafael Monea and GCA Arquitectos. The headquarters was completed three years ago, coinciding with BBVA’s purchase of CX.

BBVA’s real estate strategy

The sale of these types of portfolios is one of the channels established by the bank to reduce its real estate exposure, a strategic objective for BBVA’s Strategy and M&A area. In line with this strategy, in March, BBVA completed its second sale of a wholesale portfolio in 2017 (Project Boston), following the divestment of 3,400 properties (Project Buffalo) in February.

Original story: BBVA

Translation: Carmel Drake

D.E.Shaw Purchases €103m Of Property Developer Debt From Bankia

3 April 2017 – Idealista

Bankia has managed to sell Project Gold, a portfolio of property developer loans amounting to €102.97 million. According to market sources, the buyer is the investment fund D.E. Shaw Group. As a result of this operation, the bank chaired by José Ignacio Goirigolzarri (pictured above) has managed to decrease its doubtful debt balance by €77.24 million and sign its first portfolio sale of the year.

Project Gold comprises a portfolio of doubtful and non-performing loans amounting to €102.97 million, from a variety of industrial sectors, although the property developer segment accounts for the lion’s share.

According to a statement from Bankia, this operation allows the entity to fulfil a dual objective: to reduce delinquency, by selling off doubtful and non-performing loans, and to increase liquidity and free up resources for the granting of new loans. The sale of this package has reduced the entity’s doubtful debt balance by €77.24 million.

The bank has another batch up for sale: Project Tour is a package worth €166 million, containing 1,800 properties, including finished homes, land, commercial premises, industrial assets and hotels. These assets are located primarily in the Community of Valencia, led by Valencia; Cataluña, led by Barcelona; the Canary Islands, led by Las Palmas; Madrid and Castilla y León (where Segovia is home to the most assets).

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

More than €2,000 million in homes and debt up for sale

According to data compiled by Idealista, the banking and extra-banking sectors currently have more than €2,000 million up for sale in the form of non-performing loans secured by properties and real estate assets (homes, premises, offices, industrial warehouses and land).

Some portfolios are well-known, such as BBVA’s Project Vermont, a batch of property developer loans secured primarily by newly-constructed homes, worth almost €100 million. Several funds were interested in acquiring that lot, specifically, Oak Hill, Fortress and AnaCap.

The same entity has several more packages on the market: Project Buffalo, which comprises homes worth €400 million in total. Another project from the entity chaired by Francisco González is known as Boston, which comprises 16 office buildings located in Madrid, Barcelona and Valencia, worth €200 million. Finally, Project Rentabiliza is a portfolio containing debt to property developers.

In addition, Liberbank has Project Fox on the market, a portfolio of real estate debt worth around €200 million. It is the entity’s first (but not its last) portfolio of unpaid mortgages.

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

Translation: Carmel Drake

BBVA Sells Portfolio Of 14 Office Buildings With GBV Of €300M

17 March 2017 – Expansión

BBVA has sold a portfolio of 14 office buildings located in Cataluña, Madrid and the Community of Valencia, whose gross book value exceeds €300 million.

Given the confidential nature of the agreement, the entity has not revealed the sales price for the operation, although it did indicate that the impact of the transaction on the group’s results for 2016 had been “marginal”. The assets cover a combined gross leasable area of 116,000 m2, spread over office properties with individual surface areas of between 1,000 m2 and 24,000 m2. They are located in Cataluña (8), Madrid (5) and the Community of Valencia (1). The operation was closed following a “competitive” sales process in which numerous wholesale investors and real estate firms participated.

This is the second portfolio sale that BBVA has completed so far this year, following the divestment of 3,500 properties (Project Buffalo), which was announced last month. “We are fulfilling the road map we set out and we will continue to close operations of this kind,” said the Director of Strategy and M&A, Javier Rodríguez Soler. In addition to Projects Buffalo and Boston, BBVA also recently participated in the non-monetary capital increase of Testa Residencial.

Original story: Expansión

Translated by: Carmel Drake

BBVA Sells 3,500 Properties To Blackstone For c. €300M

20 February 2017 – El Confidencial 

BBVA has started the year with the sale of the largest real estate portfolio in its history: Project Buffalo. The portfolio contains 3,500 assets, the vast majority of which are finished homes, but it also includes storerooms, garages and retail premises, worth around €300 million in total. The whole package has been acquired by Blackstone.

All of these properties had been foreclosed and so the bank was holding them on its balance sheet. They are located mainly in Cataluña (28%), Andalucía (20%) the Community of Valencia (18%), Madrid (6%), the Canary Islands (6%) and Castilla-La Mancha (6%).

With this move, the entity has fired the starting gun on a year in which experts hope that the financial sector as a whole will accelerate its real estate divestments, not only of loans with collateral linked to properties, but also in the placement of large blocks of finished assets, like in this case.

The new regulatory requirements have represented a genuine revolution for bringing these types of portfolios onto the market. And BBVA has dealt with this change in the rules by engaging its Strategy and M&A team, led by Javier Rodríguez Soler, to be responsible for closing this kind of transaction.

Two-thirds of the more than €20,000 million real estate-related assets on BBVA’s balance sheet are foreclosed assets, whilst the remainder are loans, a clear indication of the importance for the bank of undoing these positions.

In addition to portfolio sales, the entity chaired by Francisco González (pictured above) has committed itself to joining other players in the market as a way of deconsolidating these assets. On the one hand, it is taking advantage of the merger between Merlin and Metrovacesa, by transferring thousands of homes to Testa; on the other hand, it is working with Santander and Popular to create a large bad land bank, which will allow it to also start divesting its land.

Original story: El Confidencial (by R.U.)

Translation: Carmel Drake

 

Banks Have Put €2,000M In RE Assets Up For Sale In 2017

6 February 2017 – Idealista

Real estate assets are still treated like a hot potato in the banking sector. In order to reduce the default rate (which still exceeds 25% in the case of loans to property developers) and avoid more provisions, entities such as Bankia, BBVA and Liberbank are continuing in their efforts to accelerate the sale of portfolios of unpaid secured loans, as well as packages of real estate assets. 2017 has started with almost €2,000 million in properties up for auction. (…). They include homes, premises, offices, industrial warehouses and land.

Most of the operations have been on the market for several months, since no buyers have yet been found. Some are well known, such as BBVA’s Project Vermont, a portfolio of loans to property developers secured primarily by newly built homes and worth almost €100 million. Several funds were interested in acquired this lot: Oak Hill, Fortress and AnaCap.

And it is BBVA that has the most packages on the market, including: Project Buffalo, which contains homes worth €400 million; and Project Boston, which comprises 16 office buildings located in Madrid, Barcelona and Valencia, worth €200 million. (…).

Liberbank has put Project Fox on the market. It is a portfolio of real estate debt worth around €200 million and is the entity’s first (but not its last) portfolio of unpaid mortgages.

Other operations have also made their debuts in 2017. Such is the case of Project Tour, a package being sold by Bankia, one of the most active players in the sale of real estate portfolios. It comprises 1,800 properties (…) and is worth €166 million.

Funds start to divest their purchases

The market has also started to see how some of the international funds that have invested in our country in recent years are starting to sell some of the assets they have purchased. Last year, Lone Star made its debut as a vendor (…) when it put Project McLaren on the market. It comprises two portfolios: one containing more than 1,000 mortgage loans worth €102 million and secured primarily by homes, although there are also some commercial assets in the mix. The other portfolio, comprising more than 600 homes, has a combined appraisal value of €51 million. The firm Cabot, which specialises in managing bank loans, has expressed its interest in that portfolio.

Another fund that wants to divest some of its real estate investments in Spain is the US firm Ares Management, which has put Project Firefox onto the market: real estate debt worth around €160 million.

Bankia, Caixabank and Sareb were the most active at divesting real estate in 2016 (…).

Sareb has been one of the key players in the market (in recent times), having managed to place €1,565 million of real estate debt of all kinds with international investment funds (during its three year life). Its largest non-performing loan portfolio (Project Eloise) had a nominal value of €553.3 million and it was purchased by Goldman Sachs. (…).

In 2016, Bankia had several portfolios up for sale, including Project Ocean, Project Tizona and Project Lane.

Caixabank become one of the most proactive entities in the sale of Spanish property last year. Its most high profile sales included Project Sun, with hotel debt worth around €1,000 million; Project Carlit, with around €750 million of real estate debt; and Project More 2, containing €200 million of owned properties (REOs). (…).

Other players with more limited activity included Abanca (formerly Novagalicia) and Cajamar.

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

Translation: Carmel Drake

Project Buffalo: BBVA Puts 4,000 Homes Up For Sale

16 November 2016 – Voz Populí

BBVA is stepping on the gas with the sale of its real estate assets. In recent weeks, the entity chaired by Francisco González (pictured above) has put up for sale its largest real estate portfolio since the outbreak of the crisis. The portfolio in question, known as Project Buffalo, contains around 4,000 homes worth between €300 million and €400 million, which the entity hopes to sell to international funds, according to financial sources.

The Spanish group is still one of the entities most weighed down by the property on its balance sheet, which amounts to €22,700 million, according to its results as at September 2016. €6,000 million of that figure relates to unpaid loans (doubtful and sub-standard credits) and almost €15,000 million corresponds to foreclosed assets. Even though it has a high coverage ratio (51%), BBVA has made a commitment to having an “immaterial” real estate exposure by 2018, according to its CEO, Carlos Torres.

Alongside this promise to investors, BBVA, like all of the other entities, needs to get rid of its real estate as soon as possible in order to make its business profitable again. (…). The bank chaired by González lost €315 million due to the Spanish property sector during the first nine months of this year, down by 24% compared to a year earlier.

In this context, “the strategy is to sell this exposure as quickly as possible, provided we do not destroy any value”, said Torres, speaking a few weeks ago. And for this reason, the entity has launched Project Buffalo.

This portfolio is the third largest, containing foreclosed properties, to be launched by a Spanish bank in recent years. The largest portfolio, Project Big Bang, was launched by Bankia and contained almost 40,000 homes worth €4,800 million, but in the end it was withdrawn after negotiations with Cerberus and Oaktree broke down. Subsequently, Sabadell sold 4,500 rental homes, worth €600 million, to Blackstone.

Now it is BBVA’s turn to whet the appetitive of the large international investors. Cerberus, Oaktree and Blackstone are all expected to study the operation, as well as Apollo, owner of 85% of Altamira and the purchaser of a small portfolio of homes from BMN last year; and Bain Capital (Sankaty), which acquired 2,500 properties worth around €350 million from Bankia a few months ago.

Project Buffalo is the sixth portfolio that BBVA has launched in the market this year, as part of a new drive from the new leader of the area, Javier Rodrígeuz Soler, Director of Strategy and M&A. He has taken over this role following Pedro Urresti’s move to HSBC.

The other portfolios include Project Vermont, containing €100 million of unpaid loans to property developers; Project Boston, with 16 offices buildings located in Madrid, Barcelona and Valencia; Project Coliseum, whereby BBVA sold its consumer business to Link Financial for €100 million; Project Detroit, with 441 warehouses and industrial plots of land; and Project Rentabliza, for the sale of real estate developments.

Original story: Voz Populí (by Jorge Zuloaga)

Translation: Carmel Drake