Santander Mulls Over €15 Bn Popular Property-Asset Sale

16 June 2017 – Bloomberg

Banco Santander SA is testing investor appetite for soured loans and repossessed property assets with a face value of as much as €15 billion ($16.8 billion), in a sign that the company is racing ahead with its plan to clean up Banco Popular Espanol SA’s balance sheet, according to three people with knowledge of the situation.

Santander acquired the assets when it bought stricken lender Popular last week, said the people, who asked not to be identified because the matter is private. The Spanish bank is also preparing the sale of commercial property assets valued at as much as €500 million, the people said.

Spain’s biggest lender paid 1 euro for Popular in a sale brokered by European regulators after it suffered a run on deposits. Santander said it would raise €7 billion in capital to shore up Popular’s balance sheet and embark on a rapid sale of its property. Popular has €29.8 billion of property assets and soured real estate loans, according to a presentation on Santander’s website.

Real estate assets that may be sold include Popular’s new headquarters and the Beatriz building in Madrid, whose tenants include KKR & Co., the people said. Also on the block are 1,000 rented homes, plots of land and offices in Madrid and Barcelona, two of the people said.

Santander Chairman Ana Botin told Bloomberg TV last week that her plan to turn around Popular includes the goal of selling at least half of Popular’s real estate assets in the next 18 months. Popular’s troubles reached a crisis point as doubts about the scale of its real estate losses scared away would-be buyers and its plunging share price made raising capital impossible.

The proposed sales are separate from a process Popular had in place before it was taken over to divest a €480 million batch of non-performing loans backed by 16 hotels across Spain, the three people said. The deadline for bids for those loans was June 9.

Original story: Bloomberg (by Sharon R Smyth and Estebán Duarte)

Edited by: Carmel Drake

Blackstone & Oaktree Compete For 5,000 Sabadell Homes

10 December 2015 – Expansión

Banco Sabadell is finalising what could be the largest block sale of homes by a Spanish bank in 2015. The Catalan entity is negotiating with the US funds Blackstone and Oaktree to transfer 5,000 rented homes, as part of Project Empire. Sources at the entity declined to comment on the operation.

Although there have been larger portfolio sales involving debt this year, all indications are that this sale will be the largest in the foreclosed asset segment, a space that only BMN and Bankinter have been active in so far in 2015. Popular considered it, but suspended its sale in the end and the portfolio sales that Bankia and Ibercaja currently have underway may be delayed until the first quarter of 2016.

Project Empire is an operation that Sabadell has been preparing for a long time and which has generated significant interest in the market. The 5,000 homes have a nominal value of €600 million. The fact that they are already rented out means that the most established funds in Spain have expressed their interest in them.

Such is the case of Blackstone, which owns the Anticipa platform – formerly CatalunyaCaixa Inmobiliaria – and which has purchased several bank portfolios. Meanwhile, Oaktree has unleashed itself as one of the major international investors in Spanish property, with the purchase of assets from Bankia, Ibercaja and FMS, the German bad bank.

Sabadell has reduced the volume of problematic assets on its balance sheet by €3,500 million since the start of 2014, down to €22,350 million by September 2015.

Original story: Expansión (by J. Z.)

Translation: Carmel Drake