Tag: secondary market

Europe’s Finance Ministers Consider Creating An EU Bad Bank

4 April 2017 – Expansión

According to working documents to which Efe has had access, the European Union’s (EU) Economic and Finance Ministers will meet on Friday to discuss the possibility of creating a bad bank in order to offload the non-performing loans accumulated by European banks in the market.

The text, drawn up by Malta in its role as the current Presidency of the EU, will serve as a basis for reflecting on the actions that may be adopted at the EU level, to reduce the burden of non-performing loans on European entities, during an informal meeting of the ministers in Malta.

These non-recoverable loans account for 5.4% of the total loan portfolio and are worth more than €1 billion (equivalent to more than 7% of the EU’s GDP).

In addition to the creation of an asset management company, widely known as a bad bank, consideration will also be given to the option of creating a secondary market in the EU for these types of loans, to improve supervision, strengthen insolvency regimes and tackle the accumulation of pending court cases.

“Experience suggests that the creation of asset management companies can help to tackle the accumulation of non-performing loans (NPL) regardless of their capital structure (public, private or mixed)”, said the document.

The Maltese Presidency highlighted that the establishment of this company “would very likely” represent a boost to the secondary market for these assets, by creating a transaction history, and at the same time, grouping together these loans would reduce the information gap between buyers and sellers and would facilitate access to the market for smaller banks.

Nevertheless, the Presidency explained that in the past, there have been cases in which these bad banks have served only as a “cushion for removing NPLs from the banks’ balance sheets” and that there have only been “limited sales” in the market.

As a result, it advocates a hypothetical bad bank that fulfils certain “success factors”, such as suitable governance agreements and proactive strategies to maximise the value of its portfolio.

The current EU Presidency considers that this measure should be accompanied by a “substantial boost” in investment in impaired assets in the EU, by private and public investors alike.

In this sense, it underlines that the creation of this company should be executed “in line” with EU rules regarding bank resolution and State aid.

Meanwhile, the Economic and Finance Ministers will analyse the options for boosting a secondary market in which these loans could be offloaded, which is currently being hampered by a lack of reliable information about the quality of the assets and differences in information between sellers and buyers.

In this sense, it opens the door to the creation of “state-sponsored” platforms for transactions involving non-performing loans.

Original story: Expansión

Translation: Carmel Drake

Aguirre Newman: Logistics Inv’t Totalled €413M In H1

4 August 2016 – Mis Naves

Investment in the logistics sector amounted to €413 million during the first half of 2016, a similar figure to the one recorded during the same period last year, according to the conclusions of the Logistics Market Report for H1 2016, a study conducted by the real estate consultancy Aguirre Newman. The report explains that fewer operations have taken place during this time period, but those that have been completed have been larger (in value), including the portfolio sales undertaken by Gran Europa and Zaphir Logistics.

Almost all of the profitable investments have been made in the prime markets, Madrid and Barcelona, which together accounted for 80% of the total volume bought and sold. In addition, as a result of the product shortage, investor interest is starting to move to focus on secondary markets, such as Valencia, Zaragoza, Sevilla and Pamplona.

Demand for logistics space in Madrid during the second quarter of the year decreased by 76.3% with respect to the previous quarter (Q1 2016), with just 34,233 sqm of space leased. The most significant operations, of which there were seven in total, took place in Cabanillas del Campo and Coslada, which accounted for 45% of the total space leased.

The highest rental incomes recorded in Q2 amounted to €5/sqm/month and the rents in the prime areas remained stable at between €4.5/sqm/month and €5/sqm/month, as a result of the scarcity of operations completed.

According to the report, despite the low demand for logistics space, demand for industrial assets has been dynamic with 30 operations closed during the period, corresponding to 80,829 sqm of space, half in the rental segment. In terms of sales transactions, 63.6% related to spaces measuring less than 1,000 sqm. This data indicates an improvement in terms of demand in the industrial market, with a high number of low volume operations.

Just like in previous quarters, there was a high level of activity in the market for land dedicated to industrial/logistics use, a clear indicator of the return to property developer activity and the recovery of the sector. Six operations involving land were closed both for end clients and for development through new projects. They included the purchase of more than 160,000 sqm of land in Illescas (Toledo).

In Barcelona, during Q2 2016, demand for logistics space was very positive, reaching 160,469 sqm, a very similar figure to the one recorded during the same period in 2015 and almost 80% higher than during the first quarter of 2016.

During this period, 11 operations were closed, of which four involved spaces exceeding 10,000 sqm, accounting for more than 85% of the total space leased, which focused primarily on the regions of Baix Llobregat and Tarragonès.

In terms of the most significant operations by surface area leased in Q2 2016, Aguirre Newman’s report highlights the operation closed by Amazon in Prat de Llobregat covering 60,000 sqm on the ground floor. On the other hand, in the region of Tarragonès, an operation involving 42,250 sqm of land was closed to provide services to Amazon in the performance of its activity. These two operations accounted for 64% of the total space transacted. (…).

Original story: Mis Naves

Translation: Carmel Drake

Axactor Acquires €144M NPL Portfolio From BMN

4 July 2016 – Expansión

The Nordic group Axactor, which purchased Geslico last month, is another star player in the market. It has just acquired its fourth portfolio in Spain: Project Otello, from BMN, containing €144 million worth of NPLs. The investment will be financed using Axactor’s available liquidity and credit facilities from the Norewgian bank DNB. The deal forms part of the Norwegian group’s strategy to grow in the main European markets.

By purchasing the portfolio directly from BMN, this operation is the first that the company has completed in the primary market, a type of transaction that requires greater financial and legal compliance than acquisitions made in the secondary market.

Original story: Expansión

Translation: Carmel Drake