Tag: RBS

A Swap from ING & CaixaBank: the Last Stumbling Block in the Sale of Santander’s HQ to AGC

27 July 2018 – Voz Pópuli

The sale of the company that owns Santander’s Ciudad Financiera is closer than ever to becoming a reality. The approval of the liquidation plan by a Madrilenian court set September as the deadline for offers. Nevertheless, there are still disputes to be resolved.

The main stumbling block now is a lawsuit in London against a swap (financial derivative) granted by five entities: Royal Bank of Scotland (RBS), CaixaBank, ING, HSH Nordbank and AG Bayerische Landesbank. The lawsuit, filed years ago, is based on a claim that RBS manipulated the interbank – LIBOR and Euribor – market. The lawsuit amounts to €800 million, given that the swap has cost around €90 million per year since 2008, according to financial sources consulted by this newspaper.

The discussion in Spain focuses on the fact that some of the creditors of Santander’s headquarters fear that the new owner of the company (Marme Inversiones 2007) will decide to shelve that lawsuit. It would require an agreement between the new Marme and the five banks party to the swap in exchange for renegotiating the derivative, which expires in 2023.

AGC’s offer

Those €800 million, if the process in London proves successful, could mean that all of the creditors recover their money. In particular, the original shareholder, the Brit Glen Maud, and the company Edgeworth Capital, owned by the Iranian investor Robert Tchenguiz, who took positions during the bankruptcy.

Other sources consulted indicate that there is a commitment from the main interested party in the Ciudad Financiera, the Arab fund AGC Equity Partners, to keep the Marme litigation case open.

Currently, the only offer on the table is the one presented by AGC in 2016 for between €2.5 billion and €2.8 billion, depending on the variables that are included. A year earlier, Aabar Investments, the owner of Cepsa, and Edgeworth, also submitted bids. But they were not accepted.

As we wait to see what will happen over the next two months, AGC leads the rest of the candidates to acquire Santander’s headquarters.

One of the possible counter-offers could come from Edgeworth, which negotiated a €2 billion loan with JPMorgan to participate in the liquidation plan. It also proposed that the company exit from bankruptcy without the need to be liquidated.

This operation would generate a sale with significant gains for the funds that entered the process by buying Marme’s debt from financial institutions. They include Blackstone, Canyon and Monarch.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Santander Values its Stake in the JV with Blackstone at €1.566bn

16 May 2018 – Expansión

Santander has recorded on its balance sheet its 49% stake in the company that it has created with Blackstone for a value of €1,566 million. The stake has been recognised in the portfolio of investments in joint ventures and associated companies. The bank and the US fund, which controls the remaining 51% of the JV’s share capital, constituted the company on 22 March. The alliance, a conglomerate of companies grouped together under the parent company, Project Quasar Investments 2017, brings together the former real estate portfolio of Popular. It contains gross assets worth €30 billion, which have been appraised at €10 billion net under the framework of the transaction.

Meanwhile, the two partners have now agreed on the configuration of the Board of Directors for the joint venture. The governance body will comprise seven members. In line with the distribution of the share capital and its control of the management of the assets, Blackstone will have a majority of four positions on the Board, including that of Chairman.

Santander will be represented by three directors. One of them is Javier García Carranza, the executive to whom the entity chaired by Ana Botín has entrusted the process to clean up Popular’s balance sheet. García Carranza is the Deputy CEO of Grupo Santander and a member of Popular’s Administration Board, a transition body that will disappear once the legal merger of the two banks has been completed. García Carranza also represents Santander on the boards of Sareb, Metrovacesa and the real estate manager Altamira, amongst other companies.

The other directors linked to Santander that will sit on the Board of the joint venture are Carlos Manzano and Jaime Rodríguez-Andrade, specialists in real estate investments and asset recoveries, respectively.

Meanwhile, Diego San José, Head of Blackstone’s Real Estate division in Spain is going to be the Chairman of the company. Eduard Mendiluce, Jean Francois Bossy and Jean Christophe Dubois are the other directors who have been appointed by the fund.

In order to launch the company, Santander and Blackstone have subscribed a syndicated loan amounting to €7,332 million. Several banks have participated in the loan, which is led by Morgan Stanley and Deutsche Bank, including Bank of America Merrill Lynch, JP Morgan and RBS, as well as Blackstone itself, which has contributed €1 billion. The financing has been signed over a 5-year term and matures in 2023.

The sale of Popular’s real estate portfolio and the deconsolidation of the assets have resulted in a 10 point improvement in Santander’s core capital ratio. Its solvency now stands at 11%, the target for 2018.

Original story: Expansión (by M. Martínez)

Translation: Carmel Drake

JP Morgan Negotiates €2bn Loan with Owner of Santander’s HQ

22 February 2018 – Voz Pópuli

There’s a new player in the complicated game of chess involving the bankruptcy and liquidation of the owner of Banco Santander’s headquarters, the Ciudad Financiera, in Madrid. One of the largest investment banks in the world, JP Morgan, is negotiating a €2 billion loan to unblock the bankruptcy proceedings, according to financial sources consulted by Vozpópuli. JP Morgan declined to comment about the rumours in the market. Market sources indicate that the loan has not been granted yet.

In this way, the US entity would support one of the shareholders, the company Edgeworth Capital, owned by the Iranian businessman Robert Tchenguiz. That banker is trying to get Marme Inversiones 2007, the company that owns the office complex, to emerge from bankruptcy without having to file for liquidation. To this end, it has asked Mercantile Court number 9 in Madrid to give it the green light to negotiate an early termination for payments with the creditors.

That is where JPMorgan comes in. Tchenguiz has managed to convince the entity to consider financing almost €2 billion, which would have to be used to repay all of the creditors, including several banks such as CaixaBank, ING, RBS and Santander itself, as well as funds such as GSO (owned by Blackstone), Canyon, Burlington, Värde Partners, Centerbridge and Monarch.

Many of these creditors, above all the funds that purchased debt at a discount, agree with Tchenguiz. But not the other shareholder, the British magnate Glenn Maud, who is preparing to make a rival offer, or Santander, which is leaning towards the proposal put forward by the Arab fund AGC.

Status of proceedings

After years of bankruptcy and hundreds of resources, the situation is closer than ever to being unblocked. In fact, the court has already given the green light to the liquidation plan for Marme Inversiones 2007. The problem is that two other parent companies, Delma and Ramblas, are still immersed in bankruptcy proceedings. A resolution is expected before the summer.

Unless there is a new legal war, all indications are that the financial situation of the owner of the Ciudad Financiera will be resolved this year.

Along with the proposal from Tchenguiz, the fund AGC and the consortium Madison-Maud-GCA are studying putting between €2.7 billion and €2.8 billion on the table for Santander’s headquarters, within the liquidation process.

Together with JPMorgan, Goldman Sachs is also positioning itself in this operation. It has been advising Santander for months on the solution that may be found to resolve the situation of its headquarters.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Project Gaudí: Oaktree Acquires Reduced Portfolio For €260M

25 June 2015 – CoStar Finance

Oaktree Capital Management has finalised the purchase of a reduced non-performing loan portfolio from FMS Wertmanagement (Project Gaudi) paying around €260m in cash, after a back bid sale of a Bilbao shopping centre to Grupo Lar and the removal of two loans prior to transaction close.

According to CoStar News, Grupo Lar, the Spanish developer and investor, has acquired the 1.35m sq ft Megapark Barakaldo shopping centre in Bilbao, in a back to back bid for just over €150 million.

Megapark Barakaldo was previously owned by Resolution Property, who acquired the retail centre for more than €200 million in January 2006, from Arcona Iberia and its joint venture partners, financed by Hypo Real Estate Bank International and the Royal Bank of Scotland. Resolution Property sold Megapark Barakaldo to another investor in 2012, which inherited the encumbered debt.

In addition, FMS Wertmanagement removed two loans from the original €735 million portfolio, contraining 18 NPL loans (Project Gaudi):

1) The first was a loan securing the circa 333,700 sq ft Plaza Éboli shopping centre in Pinto in the south of Madrid. HIG Capital recently acquired Plaza Éboli from Doughty Hanson, the UK private equity firm, for €30m, repaying the loan back to FMS Wertmanagement at par.

2) The second was a combined €125 millioin investment, development and VAT financing facility, granted to Bluespace, formerly known as Blue Self Storage, in July 2007. It was used to fund the acquisition of 17 self-storage properties – in Barcelona, Madrid and Valencia. FMS Wertmanagement has retained that non-performing loan.

These two removed loans are thought to account for an unpaid loan balance of around €100 million in aggregate. This reduces the original nominal value of Project Gaudi’s NPL portfolio (€735 million) to an unpaid balance of €635 million.

CoStar News understands that Oaktree paid €410m for the slightly slimmer Project Gaudi, reflecting a discount of 35.4%.

Furthermore, the immediate back bid purchase of Megapark Barakaldo by Grupo Lar for circa €150 millions implies the net price that Oaktree paid was €260 million, which was likely paid on an all-cash basis by Oaktree given the final size of the deal.

FMS Wertmanagement closed the sale of Project Gaudi with Oaktree two weeks ago. This was the German bad bank’s maiden NPL portfolio sale in Europe.

CoStar News understands that FMS Wertmanagement is considering two further country-focused loan portfolio sales for the bad bank’s Netherlands and Italian sub and non-performing loans. (…)

Original story: CoStar Finance (by James Wallace)

Edited by: Carmel Drake

Sareb Calls For Changes To Reyal Urbis’s Proposed Agreement

10 March 2015 – Expansión

Negotiations / The real estate company’s main creditor shares the legal concerns raised by the judge regarding the proposed agreement. If they are addressed, a discount of up to 93% could be accepted.

The real estate company Reyal Urbis is using up its last options to save itself from liquidation. The company submitted a proposed agreement on 13 February, which must be approved or rejected by its creditors before next Friday 13 March. Nevertheless, the proposal that has been presented has raised important questions that have lead the judge in charge of the bankruptcy process to reject the offer and ask Reyal for a series of changes and clarifications.

The judge from the Commercial Court number 6 in Madrid is not the only party for whom this proposal to exit the bankruptcy process has raised doubts. Sareb, the main creditor of Reyal Urbis with a debt of €785 million, sent a letter to the court last week expressing its concerns. Last Friday, the judge himself made these concerns clear through a series of requests to the real estate company. One of Sareb’s demands is to know the current value of Reyal Urbis’ assets, through the performance of a new appraisal.

One of the aspects that has generated the most doubt, for both the judge and Sareb, relates to the application of the agreements and waivers to all of the creditors, even those that do not sign up to the agreement. Reyal is making its own interpretation of the recent regulatory changes in the bankruptcy law whereby, if 75% of the creditors adhere to the payment proposal, then rest should waive the mortgage rights they obtained during the four refinancings that the company signed before it filed for bankruptcy. The judge considers that it cannot be assumed that all of the creditors will waive (their rights) or that the “knock-on effect” will apply.

Another controversial point is the high percentage of the discount that Reyal is calling for, which ranges between 88% and 93% for the creditors with syndicated debt (which includes Sareb and entities such as Santander, RBS and Barclays), without offering a credible business plan. In his ruling, the judge demands that (Reyal Urbis) “correct the weaknesses identified in its feasibility plan, in order to provide the necessary and essential objective justification of the discounts requested”.

Reyal has until the end of March to clarify these points and also whether it has a parallel agreement with the Tax Authorities. The real estate company intends to use some of the assets that it does not grant to the creditors (valued at €260 million and chosen by the company) as a guarantee to the Tax Administration.

With the new proposal on the table that resolves the possible uncertainties regarding the distribution of assets, the creditors will consider whether to sign up to the agreement, or conversely, let the real estate company go under, as happened with its counterpart Martinsa Fadesa. Sources close to the creditors believe that the two cases are not the same and that the entities may give Reyal a chance, just like they did with Fernando Martín’s company in 2011.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Judge Asks Reyal Urbis To Rectify Errors In Its Creditors’ Agreement

9 March 2015 – Expansión

The judge at the Commercial Court number 6 in Madrid has ruled that the real estate company Reyal Urbis must present additional documentation and perform “certain rectifications” to the draft agreement that the company presented to exit from its bankruptcy proceedings.

The real estate company, which filed for bankruptcy in February 2011, submitted a payment plan to the court, containing a proposal for the settlement of the €3,978 million debt that it owes.

Reyal Urbis has offered its creditors, which include banks such as Santander, Popular and RBS, as well as Sareb and ICO, a discount of more than 80% on its liabilities and to pay the remaining debt with assets.

The real estate company holds assets amounting to €1,474 million, after it sold several buildings such as the ABC Serrano shopping centre in Madrid. It has just agreed with the tax authorities that it will pay its debt in full, which amounts to around €400 million, but over a long period of time.

The request made by the Commercial Court suspends the period for achieving agreement, which would otherwise have become effective before 13 March.

Martinsa Fadesa

Meanwhile, the Commercial Court in La Coruña has announced the opening of the liquidation phase of Martinsa Fadesa, which owns €6,600 million, after the real estate company failed to obtain support from its creditor banks for a new banking agreement.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Reyal Urbis Offers Its Banks 20% Of The Debt It Owes Them

13 February 2015 – Expansión

The listed real estate company Reyal Urbis will submit its payment proposal today to allow it to overcome the bankruptcy process in which it has been immersed for two years now.

The real estate company controlled by Rafael Santamaría will offer its creditors, which include entities such as Santander, Banco Popular and RBS, as well as Sareb and ICO, a haircut of 80% of the debt and the payment of the remainder through the transfer of assets.

The real estate company filed for bankruptcy in February 2013, after a string of up to four refinancing processes. According to the bankruptcy report, the company has a debt of €3,978 million, an equity deficit of €2,878 million and assets amounting to just €1,474 million. After selling off various iconic assets, such as the ABC Serrano and Castellana 200 shopping centres, both in Madrid, and the Diagonal Port Hotel in Barcelona, Reyal and its creditors have been working together to distribute the rest of its assets, in the form of lots, which will be awarded through a draw.

The tax authorities

The proposal for an 80% haircut will not apply to all of the creditors, since the real estate company will propose a different offer to the Tax Authorities.

Reyal Urbis will offer to pay the Public Administration the full amount it owes in cash (€400 million) over the long term, say sources close to the process.

Creditors have until 13 March to accept or reject Reyal Urbis’ proposal. If it does not obtain the agreement of the entities, the real estate company will end up with a small lot of assets and a manageable debt.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake