Project Traveler: Sabadell Sells €364M NPL Portfolio To Bain

29 December 2016 – Vozpópuli

The fund Bain Capital Credit (formerly Sankaty) is consolidating its presence in the financial-real estate sector with its fourth acquisition this year. Within the last few days, the investor, which is one of the largest private equity funds in the world, has acquired a portfolio from Banco Sabadell: Project Traveler contains debt relating to 60 developments and hotels worth €364 million.

The entity chaired by Josep Oliu has received around €150 million from this operation, according to financial sources consulted. As such, Sabadell has removed some more non-strategic assets from its balance sheet, which were consuming capital and provisions. This bank is one of the most active in these types of sales as it continues to clean up its balance sheet.

With this acquisition, Bain Capital Credit brings to an end a record year for investment in Spain. The fund has been awarded four large banking portfolios (two from Sabadell, one from Cajamar and one from Bankia) with a combined value of €1,510 million. Given that the banks are selling their real estate debt at prices of between 0.3 and 0.4 times the nominal value, Bain must have spent more than €500 million on these purchases.

As such, the US fund has placed itself amongst the major players in the market for the purchase of distressed assets (those close to bankruptcy) from the banks, alongside Blackstone, Apollo, Goldman Sachs, Cerberus, Oaktree and Deutsche Bank.

“We continue to see Spain as one of the most attractive markets in Europe. We see potential for future investments in the south of Europe, particularly in the real estate sector and the field of unpaid loans”, said Fabio Longo, Director General and Head of European Business at Bain Capital Credit for the real estate sector and doubtful debt.

The other portfolio Bain purchased from Sabadell contained non-performing loans to property developers, with a nominal value of €415 million. Cajamar sold Bain a package of loans worth €511 million, with the special feature that they were all loans to real estate companies that had filed for bankruptcy. Meanwhile, Bankia awarded Bain a batch of 2,500 homes with a combined appraisal value of €220 million. (…).

Copernicus provided financial advisory in this transaction; Aura REE, CBRE, Horwath and Cushman & Wakefield were the real estate valuations providers; Allen & Overy was the legal advisor.

Original story: Vozpópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Project Traveler: Sabadell Puts A €500M RE Portfolio Up For Sale

14 October 2016 – Voz Pópuli

Banco Sabadell has taken the lead in the Spanish banking sector once again with the sale of its toxic assets. Over the last few days, the Catalan entity has distributed a teaser (information brochure for investors) detailing a new real estate operation: Project Traveler. The portfolio contains 30 hotels, 30 work in progress real estate developments and other debts to SMEs, according to financial sources.

The operation involves collateral worth €500 million and it is already generating a lot of interest amongst international funds.

With this latest deal, Sabadell now has €1,500 million up for sale, given that straight after the summer, it put Project Normandy on the market, through which it wants to sell doubtful debt amounting to €1,000 million. Following the receipt of non-binding offers, that operation has recently entered its final phase, which will last for around a month.

The entity chaired by Josep Oliu has been one of the most active in recent years in terms of selling problem assets. Sabadell wants to reduce the real estate portfolio that it mainly inherited from the acquisitions that it made during the crisis in Spain, such as CAM, Caixa Penedès and Banco Guizpuzcoano, as quickly as possible.

According to the most recently published figures, as at June 2016, the bank held €19,900 million in problem assets, having reduced that balance by €6,000 million over the last two years. Along with portfolio sales, one of the key elements of the bank’s strategy is the work being performed by its real estate arm Solvia. That entity sells homes through the bank’s network and agents, and is responsible for managing overdue debt.

Project Traveler has attracted attention in the market because it is the second portfolio containing hotels to come onto the market in 2016, after Project Sun, being sold by CaixaBank, which is in the very final stages of negotiation.

Other operations

After the short break at the end of July due to the impact of Brexit on the market, the sale of portfolios has resumed once again in recent weeks. The first operation involved Abanca, which sold €300 million in unpaid mortgages to KKR; and then came Sareb’s return to the market – it is offering investors portfolios worth more than €1,000 million, after a year without any operations following the introduction of the Bank of Spain’s accounting circular.

For the large opportunistic funds, such as Cerberus, Blackstone, Apollo, Bain Capital – formerly Sankaty – and TPG, and the large investment banks, such as Goldman Sachs and Bank of America, these operations represent one of the best ways of making money in Spain at the moment. (…).

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake