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

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

Deutsche Buys €400M Developer Loan Portfolio From Bankia

4 July 2016 – Expansión

Deutsche Bank has reaffirmed its commitment to the Spanish real estate market despite instability in the markets caused by Brexit. Last week, funds from the German entity sealed the acquisition of almost €400 million in doubtful property developer loans from Bankia.

This is the second transaction of its kind that Deutsche Bank has signed with Bankia in just six months. At the end of 2015, it acquired just over €600 million in unpaid company loans, backed by real estate collateral. In this way, the German bank became the owner of at least one hundred loans linked to property that had originated on Bankia’s balance sheet.

Sources in the market estimate that Deutsche Bank could have paid just under €150 million for this latest operation, known as Project Ocean.

With these types of portfolios, funds are typically looking for loans that give them relatively easy access to real estate collateral, either through legal foreclosures or agreements with the borrowers.

These deals allow the vendor entities to reduce their default rates; lower their risk-weighted assets; generate gains, in some cases; and focus their resources on granting new, profitable, loans.

In fact, Bankia is close to completing another major divestment within the next few days, with the transfer of 2,500 flats to the fund Sankaty, the subsidiary of the US giant Bain Capital. These properties have been valued at between €300 million and €400 million.

A new star

This investor has become the largest purchaser of problem assets from the banks (in Spain) in 2016. In this way, in addition to Bankia’s portfolio, Sankaty signed another two acquisitions last week: Project Pirene, comprising €460 million in problem assets linked to property developers, from Sabadell; and Project Baracoa, containing 2,400 loans to bankrupt companies, worth €530 million, from Cajamar.

Sector sources say that these operations prove that investors are still interested in Spain, even through Brexit has made the financing of these purchases more difficult.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Sabadell & Bankia Finalise RE Portfolio Sales To Sankaty

29 June 2016 – Expansión

Spanish banks and international funds are negotiating against the clock as they seek to close operations worth hundreds of millions of euros within the next few days. Entities have offers on the table for real estate assets worth almost €4,000 million. And some of them are expected to bear fruit today or tomorrow, so that they can be accounted for in the half-year results.

The negotiations are even more frantic than in previous years due to the slowdown caused by the electoral calendar, which caused opportunistic funds to be prudent with their offers. One of the most influential factors was the fear that Podemos would enjoy electoral success.

Now that the uncertainty (surrounding Podemos) has been resolved, Sabadell and Bankia have been particularly agile in reaching agreements.

Yesterday, the Catalan entity sold a portfolio containing €460 million of problem assets linked to property developers, as part of Project Pirene. The buyer is the fund Sankaty Advisors, a subsidiary of the US giant Bain Capital. Sources in the market estimate that the investor paid Sabadell between €150 and €200 million for these assets.

Dominant investors

Sankaty’s interest in Spain has not been limited to that portfolio, given that it is close to securing another deal that has attracted significant interest from other large international investors: Project Lane, sold by Bankia, comprising 2,500 homes worth €400 million. This is the first portfolio to emerge from the carved up Project Big Bang; the entity had wanted to sell all of its foreclosed assets together, but that plan was suspended at the end of last year. Sources expect to know whether this operation will go ahead within the next few days.

The sale of the other two asset portfolios that Bankia has on the market are proceeding more slowly: one contains non-performing mortgages – Project Tizona – worth €520 million; and the other contains non-performing property developer loans – Project Ocean – amounting to €400 million.

Sankaty expects the recovery of the Spanish real estate sector to go beyond Sabadell and Bankia’s portfolios, as indicated by the fact that it is one of the main favourites to acquire Project Baracoa, from Cajamar. That will be the first sale of bankrupt loans by a Spanish bank. In total, the rural savings bank is looking to get rid of €800 million of these types of loans, which account for 70% of all of its bankrupt assets. 85% of them are secured by real estate collateral.

Another operation that is generating significant interest is Project Carlit, launched by CaixaBank, through which the Catalan group wants to transfer €790 million of doubtful loans to property developers. The bid is in its final phase with two key favourites in the running: Cerberus, which according to sources consulted is “putting all of its eggs into one basket”; and the alliance between Goldman Sachs and TPG, two US investors who have joined forces in the past. The US fund D. E. Shaw is also through to the final round, but it has not participated in any operations in Spain for a long time and the market considers that it is less likely to win the portfolio.

CaixaBank has another major operation underway: Project Sun, through which it wants to sell 155 hotel assets worth almost €1,000 million.

Another one of the most active entities is Abanca, which recently sold €1,400 million in non-performing loans to EOS Spain and which will be negotiating the sale of €400 million property developer loans over the next few weeks.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake