Tag: Project Vermont

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 Buffalo: BBVA Puts 4,000 Homes Up For Sale

16 November 2016 – Voz Populí

BBVA is stepping on the gas with the sale of its real estate assets. In recent weeks, the entity chaired by Francisco González (pictured above) has put up for sale its largest real estate portfolio since the outbreak of the crisis. The portfolio in question, known as Project Buffalo, contains around 4,000 homes worth between €300 million and €400 million, which the entity hopes to sell to international funds, according to financial sources.

The Spanish group is still one of the entities most weighed down by the property on its balance sheet, which amounts to €22,700 million, according to its results as at September 2016. €6,000 million of that figure relates to unpaid loans (doubtful and sub-standard credits) and almost €15,000 million corresponds to foreclosed assets. Even though it has a high coverage ratio (51%), BBVA has made a commitment to having an “immaterial” real estate exposure by 2018, according to its CEO, Carlos Torres.

Alongside this promise to investors, BBVA, like all of the other entities, needs to get rid of its real estate as soon as possible in order to make its business profitable again. (…). The bank chaired by González lost €315 million due to the Spanish property sector during the first nine months of this year, down by 24% compared to a year earlier.

In this context, “the strategy is to sell this exposure as quickly as possible, provided we do not destroy any value”, said Torres, speaking a few weeks ago. And for this reason, the entity has launched Project Buffalo.

This portfolio is the third largest, containing foreclosed properties, to be launched by a Spanish bank in recent years. The largest portfolio, Project Big Bang, was launched by Bankia and contained almost 40,000 homes worth €4,800 million, but in the end it was withdrawn after negotiations with Cerberus and Oaktree broke down. Subsequently, Sabadell sold 4,500 rental homes, worth €600 million, to Blackstone.

Now it is BBVA’s turn to whet the appetitive of the large international investors. Cerberus, Oaktree and Blackstone are all expected to study the operation, as well as Apollo, owner of 85% of Altamira and the purchaser of a small portfolio of homes from BMN last year; and Bain Capital (Sankaty), which acquired 2,500 properties worth around €350 million from Bankia a few months ago.

Project Buffalo is the sixth portfolio that BBVA has launched in the market this year, as part of a new drive from the new leader of the area, Javier Rodrígeuz Soler, Director of Strategy and M&A. He has taken over this role following Pedro Urresti’s move to HSBC.

The other portfolios include Project Vermont, containing €100 million of unpaid loans to property developers; Project Boston, with 16 offices buildings located in Madrid, Barcelona and Valencia; Project Coliseum, whereby BBVA sold its consumer business to Link Financial for €100 million; Project Detroit, with 441 warehouses and industrial plots of land; and Project Rentabliza, for the sale of real estate developments.

Original story: Voz Populí (by Jorge Zuloaga)

Translation: Carmel Drake