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

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

Liberbank Puts €200M Mortgage Portfolio Up For Sale

16 November 2016 – Voz Populi

Liberbank’s sole objective right now is to reduce its default rate. The entity led by Manuel Menéndez is working around the clock to try to control its default rate, which will soar from 8.8% to more than 16% on 1 January 2017. For this reason, it has just launched the sale of its first portfolio in the last two years aimed at large investors.

This situation has arisen because the programme of guarantees that it received in exchange for acquiring the state-intervened bank CCM is coming to an end. Until now, none of the problem assets from the Manchegan savings bank have been consolidated into Liberbank’s balance sheet, but they will be from next year.

The entity born out of the mergers between Cajastur, Caja Cantabria and Caja Extremadura, and the purchase of CCM, has put its retail network into full swing to try and sell the maximum number of homes possible. In addition, Liberbank will now focus on the sale of portfolios to large international investors.

The first portfolio to come onto the market is known as Project Fox, containing between €150 million and €200 million in unpaid mortgages, according to financial sources. It is not the first entity to sell loans granted to individuals to buy homes; Bankia and Deutsche Bank España have also done the same recently.

Liberbank will try and close Project Fox before the end of the year, although it would not be a problem if the sale gets pushed back to Q1 2017. That is because the final year end accounts that the entity presents for 2016 as a whole, will still benefit from the cushion of CCM’s asset protection scheme (EPA) to decrease the default rate. The accounts that it publishes in March will be the first to reflect the new situation without the aid.

Several portfolios

At least one or two other portfolios will be put on the market alongside Project Fox over the next few weeks. According to several financial sources, one will contain non-performing loans (to SMEs and consumers) amounting to several hundreds of millions of euros. In total, all of the divestments that the financial group is putting on the market during the final stretch of 2016 will exceed €500 million.

Liberbank’s aim is to stabilise its default rate at less than 15% by the beginning of 2017. The entity has not ruled out participating in a major operation next year, to allow it to return to normality in terms of its doubtful and foreclosed assets, primarily by getting rid of its properties in Castilla-La Mancha.

The pressure on the entity is growing, given that both the Bank of Spain and the European Central Bank (ECB) are focusing on provisions, in the face of the new domestic accounting circular and the entry into force in 2018 of new international regulations, which will change the rules of the game.

These are not the first portfolio sales undertaken by Liberbank. It sold a non-performing portfolio to Cerberus in 2013 and another non-performing portfolio to JB Capital Markets in 2015. In addition, it negotiated the sale of its doubtful debt recovery platform to Lindorff and Cerberus in 2014, although the operation did not go ahead in the end after it failed to get approved by the Board of Directors.

Original story: Voz Populi (by Jorge Zuloaga)

Translation: Carmel Drake