Sankaty Finalises Purchase Of 40 Large Loans From Bankia

6 May 2015 – Expansión

During 2015, Bankia has become an important focus point for international funds. Along with the sale of properties amounting to €4,800 million, the nationalised entity has launched three other large sales processes to divest non-strategic assets: one contains hotel debt – Project Castle; another involves problem mortgages – Project Wind; and the third includes large loans to real estate companies – Project Commander. The last of these is likely to close first, since the US fund Sankaty, a subsidiary of Bain Capital, is now in exclusive negotiations to seal the purchase and may sign an agreement in the next few days.

If the agreement comes to fruition, the investor will acquire 170 loans granted to 39 companies linked to the property sector. Of those, 31 are property developers that have filed for bankruptcy or liquidation. The portfolio include several loans granted to companies such as the Catalan firm Promociones Habitat.

Most of the loans are syndicated and bilateral, secured by rural land and industrial warehouses. The nominal value of the portfolio amounts to €500 million. Sankaty already acquired one portfolio from Bankia last year, together with the hotel investment giant Starwood. They paid the bank €400 million for hotel and real estate loans.

Original story: Expansión

Translation: Carmel Drake

Bankia Puts 40 Large Property Loans Up For Sale

7 April 2015 – Expansión

Project Commander / The bank is holding negotiations with opportunistic funds regarding the transfer of real estate loans worth €500 million.

Bankia is causing a storm amongst large overseas funds in 2015. The entity chaired by José Ignacio Goirigolzarri recently announced two large divestments aimed (precisely) at those investors; they are pioneering due to the types of assets that they include: one contains overdue mortgages and the other contains large loans to real estate companies.

In total, Bankia has put unpaid property-related loans up for sale amounting to €1,800 million. Through this strategy, the bank is seeking to reduce its balance of doubtful loans and to continue awarding real estate assets.

The most advanced transaction (in terms of progress) is the one involving the large loans (to real estate companies). Project Commander, the name of the deal being advised by Deloitte, includes 170 loans granted to 39 companies, worth more than €500 million. Of those companies, 31 are property developers and almost all of them have filed for bankruptcy or liquidation, according to sources at the overseas funds. Some of the loans were granted to companies such as the Catalan group Promociones Habitat, the same sources reported.

Exposure to land

Most of the loans are syndicated and bilateral and provide access to a wide range of assets. These include land – €200 million – most of which is rural; and industrial warehouses – €90 million -. The fund(s) that win(s) the bid will also be in a position to take ownership of office buildings, homes, a fully operational aparthotel and even a winery.

Along with the real estate assets, a small portion of the portfolio is backed by pledged shares and other types of economic rights in creditor bankruptcy.

Almost two thirds of the real estate portfolio is located in Castilla-La Mancha – mainly Toledo -, Andalucía and Cataluña.

According to the agreed timetable, the funds must present their final offers within the next two weeks and the transaction should close before the end of the month. Sources close to the process indicate that Bankia may obtain between €150 million and €200 million for Project Commander.

To secure the deal, many of the large funds have purchased real estate platforms during the last two years: Apollo (Altamira), Cerberus (Haya Real Estate), Blackstone (Anticipa), TPG (Servihabitat), Lone Star (Neinor), Centerbridge (Aktua) and Värde Partners-Kennedy Wilson (Aliseda).

These investors have already participated in some of the large real estate loan purchases. Blackstone purchased the largest portfolio ever transferred in Spain to date, Project Hercules, which comprised problematic mortgage loans from Catalunya Banc amounting to almost €6,500 million; and, more recently, Blackstone acquired a non-performing property developer loan portfolio from CaixaBank. Meanwhile, Lone Star purchased a loan portfolio from Eurohypo for €3,500 million.

Nor does the market rule out the emergence of new players such as Pimco, Chenavari and Deutsche Bank.

Meanwhile, yesterday Fitch increased the rating of Bankia’s mortgage bonds by one notch to A-.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake