Centerbridge Could Raise €200M-€300M From Sale Of Aktua

6 November 2015 – Expansión

The consolidation has begun of the banks’ former real estate companies, also known as servicers. The US fund Centerbridge has put its subsidiary Aktua up for sale, which it acquired from Banesto in 2012. The operation – known as Project Pegasus – has been entrusted to the investment banks Barclays and Bank of America, and to the law firm Linklaters, and has been valued at between €200 million and €300 million, according to various sources.

Aktua currently employs around 400 people and manages real estate assets worth €6,000 million. Alongside the assets that originated from Banesto – whose management it maintained following that entity’s integration with Santander – Centerbridge also manages properties and debt from BMN and several recovery contracts for other entities.

Centerbridge’s withdrawal from the market was first triggered when Aktua lost the contract it had held with Sareb, following that entity’s tender to select new managers in 2014. Since then, those assets have been managed by Altamira, owned by Apollo and Santander, which seems to be the likely candidate to take over Aktua.

Sources in the sector do not rule out the possibility that Aktua will end up in the hands of one of the other servicers that are part-owned by funds operating in Spain, such as Altamira; Aliseda, owned by Värde, Kennedy Wilson and Popular; Haya Real Estate, owned by Cerberus; Servihabitat, owned by TPG and CaixaBank; and Anticipa, owned by Blackstone. They have also not ruled out the possibility that Solvia, owned by Sabadell, will enter the process, since it was awarded one of the Sareb contracts.

With these kinds of operations, international funds are looking to obtain scale and efficiency in order to make their platforms more profitable. These investors spent almost €2,300 million buying servicers from the banks.

According to Reuters, new funds, interested in entering the sector for the first time, may also join the bidding, such as the private equity firm Permira.

In addition to these possible mergers, experts in the sector also expect that some of the entities that have not outsourced the management of their assets may do so. In fact, Ibercaja is progressing with Project Kite, which includes 6,900 residential units, 1,300 commercial premises and industrial warehouses and 600 plots of land, worth €800 million, and a team of professionals specialising in the segment, comprising around 50 employees.

Centerbridge’s exit from this business comes at a time when other opportunistic funds are also leaving the market, such as Elliott, which recently sold its recovery management platform to Cabot; and Fortress, which has put two of its main businesses in Spain up for sale: the financing company Lico Leasing and the loan management platform Paratus.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Project Goya: Ibercaja To Sell Loans To Oaktree For €350M

27 October 2015 – Expansión

Ibercaja continues to take steps to clean up its balance sheet as the rumour mill runs rife about mergers in the sector.

The Aragonese entity is negotiating the finishing touches on the transfer of one third of its portfolio of property developer loans to the US fund Oaktree, with a nominal value of €900 million, according to financial sources. The agreed price will amount to between €350 million and €400 million.

This will be the largest divestment undertaken by Ibercaja to date and fits within the current clean up strategy that the medium-sized entities are accelerating ahead of going public or merging next year.

The sale forms part of Project Goya, which Ibercaja put up for sale before the summer, guided by the investment bank N+1.

This portfolio comprises debt from 124 Spanish property developers and is secured by finished housing and developable land. In total, the loans are linked to almost 2,200 homes and other residential assets, primarily located in Andalucía, Madrid and Cataluña.

Goldman Sachs and Blackstone are also competing in the final stage of the process alongside Oaktree. These types of portfolios tend to be placed in the market for around one third (of their nominal value), therefore Ibercaja looks set to make a gain of €50 million more than it initially expected.

With the sale of these kinds of assets, Ibercaja is looking to fulfil two main objectives: clean up its credit portfolio and obtain resources – free up provisions – to use in its recurrent business.

Express clean-up

After Bankia, the entity led by Amado Franco is the Spanish group that has taken the most decisive strategy to divest its real estate portfolio. Both entities have launched operations to drastically reduce their real estate exposure. In the case of Bankia, this strategy is focused on Project Big Bang – comprising assets amounting to €4,800 million – for which it has so far received offers from Oaktree and Cerberus.

Meanwhile, in addition to Project Goya, Ibercaja has another project underway known as Project Kite. There it is looking to sell the majority of its foreclosed assets: 6,900 residential units, 1,300 premises and industrial warehouses and 600 plots of land, worth €800 million. (…).

For Oaktree, this operation would enable it to strengthen its strategy in Spain. The fund has already closed two large purchases in recent months, namely: the problem debt from the German bad bank, FMS, in Spain, with loans secured by hotels, such as the Arts de Barcelona hotel; and a portfolio of unpaid mortgages from Bankia.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

BMN Sells Part Of Its Recovery Business To Lindorff

6 October 2015 – Expansión

BMN is completing the sale and outsourcing of its recovery business in an agreement with Lindorff. The entity, led by Carlos Egea, has awarded the management of its late-stage non-performing debt portfolio (balances that have been overdue for more than 120 days) to the Norwegian financial group, according to financial sources consulted by Expansión.

According to the same sources, Lindorff has paid around €20 million for the contract to manage this debt for ten years.

It is the second such contract that BMN has awarded to Lindorff. The Norwegian group has been managing BMN’s early-stage non-performing debt portfolio (balances that have been overdue for up to 120 days) since the beginning of 2014; it paid €36 million for this contract.

The nationalised group also did the same thing with its own firm Inmare, dedicated to the management of foreclosed assets and real estate debt; it sold the company to Aktua (owned by Centerbridge) for almost €50 million.

In total, BMN has obtained just over €100 million from these kinds of operations in recent years. These types of sale allow the entity to generate capital gains, which it uses to strengthen its capital base. Although the funds, in this case Lindorff, pay the capital upfront, they recover it subsequently through commissions based on objectives.


One of the other reasons behind such deals, which would have carried less weight in this transaction, is the outsourcing of a service in which banks are not experts and whose results improve when it is delegated to specialist firms such as Lindorff.

The operation has been advised by Montalbán Atlas Capital, a firm that has coordinated similar transactions in the past, such as the one closed by Popular, which sold its recovery business EOS for €135 million; and Sabadell, which sold its business to Lindorff, for €162 million.

In addition to the sale by BMN, Ibercaja has launched the transfer of its real estate management division, together with all of its foreclosed assets, in an operation known as Project Kite.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Ibercaja Has 3 Portfolios Up For Sale With Assets Of €2,300M

14 July 2015 – Cinco Días

The Aragonese entity is currently managing three separate divestments

Ibercaja wants to clean up its balance sheet and diversify its business before it goes public at the end of 2016. The entity currently has real estate assets worth €2,300 million up for sale under three separate transactions. Ibercaja wants to retain its independence by listing on the stock exchange. The deadline for the presentation of non-binding offers for the portfolio known as Project Kite is this week.

Ibercaja has its mind made up. It does not want to participate in any mergers and is even less willing to be absorbed by another, larger entity. “A few years ago, they tried to include us in mergers through the SIP, but we were not at all convinced. We wanted to retain our independence and that is still our plan”, say sources at the bank when asked about a possible merger with the other medium-sized banks (such as Unicaja, BMN, Ibercaja, Kutxabank, Abanca, Liberbank, Cajamar and Bankinter). The entity chaired by Amado Franco plans to go public at the end of 2016, and it has already engaged KPMG to conduct the relevant studies with that objective in mind. The decision to go public is closely linked to the “Law on Banking Foundations”, which forces the former savings banks to go public if they do not want to be penalised with a reserve fund because their foundations control more than 50% of their capital. The ECB is also putting pressure on these entities to list and or/merge.

One of the main objectives of Ibercaja’s strategic plan for 2015-2017 is the divestment of unprofitable assets. A few days ago, it sold a portfolio of non-performing loans amounting to €200 million, for which it pocketed just over €10 million. Now it has out Project Goya on the market, with assets amounting to around €900 million, in the form of debt to property developers, secured by homes, according to reports from Idealista.

This transaction comes just a few weeks after the entity put Project Kite on the market, which includes mortgage loans from 124 property developers, amounting to around €800 million. In fact, this week sees the deadline for interested investors to submit their non-binding offers. Moreover, during the first six months of the year, the entity sold 1,971 properties through its real estate platform, Salduvia.

Those sales were generated in a homogeneous way across the whole country. The figure represented a 12% increase on the sales recorded a year earlier and represented the divestment of 25% of the stock that the entity had for sale. These transactions have been closed with an overall discount of 4% on the appraisal value of the assets and have generated a positive result on the net book value of €6 million. Salduvia’s sales forecasts for this year stand at 4,300 homes, i.e. 75% of the stock that is currently available for sale and an increase of 20% on the sales recorded in 2014, which amounted to 3,558 units. That sales figure would represent a reduction in real estate risk of €650 million.

Original story: Cinco Días (by Ángeles Gonzalo Alconada)

Translation: Carmel Drake

Ibercaja Sells €210M NPL Portfolio To Seer Capital

6 July 2015 – Expansión

On Friday, Ibercaja closed the sale of a portfolio of non-performing loans, worth €210 million, to the US fund Seer Capital. The operation generated gross profits of almost €10 million for the Aragonese entity.

The portfolio contained doubtful unsecured loans, which were all fully provisioned, as well as non-performing loans.

Like other institutions, Ibercaja has accelerated the sale of problematic loans in recent years to devote its resources to productive assets and obtain profits on loans that it has already written off.

Ibercaja sold a similar portfolio in 2013, worth €540 million, to the US fund Yorvik and Savier Asset Management, owned by Javier Botín.

This is the first transaction that Seer Capital has undertaken in Spain. The fund was created in 2008 by Philip Weingord, former director of Deutsche Bank. The US firm manages assets worth €1,806 million, including mortgages, syndicated loans, SME loans and consumer finance with some kind of default (non-payment).

Other divestments

Moreover, Ibercaja Banco has refocused its strategy in recent months to take on a more active role in the market. Thus, the entity has engaged KPMG as an external advisor to perform the preparatory work towards an IPO in the coming years. The entity has until the end of 2018 to list on the stock exchange and so it has recently begun to explore that option in more detail.

In addition, a few weeks ago, the entity began a process to transfer the majority of the properties on its balance sheet. In total, the Aragonese group has put €800 million of foreclosed assets up for sale, including 6,900 residential units; 1,300 commercial premises and industrial buildings; and 600 plots of land. The transaction, known as Project Kite, is being advised by N+1.

Original story: Expansión (by J. Z.)

Translation: Carmel Drake

Project Kite: Ibercaja Puts €800M RE Portfolio Up For Sale

9 June 2015 – Expansión

Project Kite / The Aragonese group has engaged N+1 to negotiate the sale of 6,900 residential units, 1,300 retail premises and industrial warehouses and 600 plots of land with large overseas funds.

Ibercaja wants to forget about its real estate legacy and focus on its traditional business. After studying a possible operation for several months, the Aragonese group has now decided to sell nearly all of its real estate business. To this end, it has engaged N+1, which has distributed preliminary information about Project Kite to large international funds over the last few days.

Through this operation, Ibercaja offers investors €800 million of foreclosed assets, according to financial sources. Based on the latest available figures, as at the end of 2014, the group held more than €900 million of foreclosure homes, land and property developments on its balance sheet.

The €800 million portfolio will include 6,900 residential units (homes, garages and storerooms); 1,300 retail premises and industrial warehouses; and 600 plots of land, almost half of which have building permits. The homes are primarily located in Zaragoza, Madrid and Barcelona.

Management contract

According to sources, the operation may include a management contract for the remaining real estate assets and the transfer of a team of specialist professionals, comprising around 50 employees. The model for the transaction will be similar to the one adopted by Kutxabank last year.

With this project, Ibercaja joins Bankia, which recently put all of its foreclosed assets up for sale, in the so-called Project Big Bang. These entities are looking to get rid of the real estate assets that are weighing them down, whereby taking advantage of the interest that large funds are showing in becoming Spain’s new property companies, and thus being able to use their resources to grant new loans once more.

The political environment following the regional and local elections has caused many funds to review their strategies, although according to financial sources, they will continue to buy assets provided the misgivings about the general election do not increase.

Ibercaja already explored the possible sale of its real estate portfolio in the middle of 2014, but in the end it backed out.

In 2014, the group also studied the possibility of an institutional investor acquiring some of its share capital; it engaged JP Morgan to assist with that analysis, but ended up ruling out the option. All indications are that Ibercaja will accelerate its IPO in 2016, in line with the philosophy of the savings bank law and the wishes of the ECB.

The Aragonese entity – the result of the merger of Ibercaja and Caja 3 – generated €42.6 million during Q1 2015, up 6% from a year earlier.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake