Tag: unpaid mortgages

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

Sabadell Still Struggling To Digest CAM’s RE

30 January 2017 – El Mundo

Real estate is continuing to weigh down heavily on Banco Sabadell’s balance sheet, above all due to the complications involved in digesting the enormous portfolio of properties that it inherited from CAM, most of which are located in the Community of Valencia. The entity is selling more properties than ever, its revenues have soared, the number of assets being sold exceeds the number of properties being foreclosed and the prices at which it is selling its real estate are continuing to rise, however, the overall impact of the initiative is still generating losses, albeit for the time being. Specifically, Sabadell’s real estate asset business unit lost €908.4 million in 2016, according to the Group’s annual results, which were presented in Barcelona on Friday.

Those losses already reflect the effect of the Asset Protection Scheme (EPA), which the entity relies on to cover 80% of the losses generated by CAM’s real estate portfolio.

The Catalan bank still holds €9,035 million in real estate assets on its balance sheet, which represents just 2% less than at the end of 2015. Most of those properties (land, buildings, homes etc) belong to the stock of loans that it inherited from CAM and are located in that former entity’s areas of operation, in other words, the Community of Valencia and Murcia. Of those €9,035 million real estate assets, €7,166 million stem from foreclosed assets and embargos of construction companies and property developers, which were unable to repay their loans, and of those €3,851 million corresponds to land. In other words, 42% of the entity’s stock is land, the least liquid asset.

Sabadell owns finished homes worth €1,377 million. Moreover, its properties from unpaid mortgages amount to €1,918 million.

Overall, the bank has managed to offset the mass entry of properties onto its balance sheet with an intensification of sales. For example, it closed 2016 with the entry of properties (homes, land, premises, etc) worth €384 million, whilst the sale and divestment of these assets amounted to €457 million. In other words, it is now selling more than it is taking on.

Solvia is working hard too

In addition, Solvia, the bank’s real estate subsidiary, which has its operations centre in Alicante, sold assets worth €1,557 million last year, up by 40% compared to the previous year, with 14,553 operations, i.e. 27% more. The entity said that “the reduction in the sales discount and the overall increase in prices are signs of the recovery”. Last year, Solvia relied on sales of large asset portfolios to institutional investors to improve its ratios. Not in vain, 22% of its sales are made to that kind of buyer. (…).

Original story: El Mundo (by F.D.G.)

Translation: Carmel Drake

INE: 3M New Homes Since 2001, But 62% Not Yet Paid For

26 April 2016 – El Economista

The real estate boom at the beginning of this century caused the housing stock in Spain to increase by almost three million. Most of those homes were acquired as main residences, but the majority have not been paid for yet (they still have outstanding mortgages). That is according to Spain’s National Institute of Statistics (INE), which estimates that 2.974 million homes were constructed between 2001 and 2010. Of those, 1.85 million (62%) still have mortgages pending payment.

Another 562,000 homes constructed in the last decade have also been sold and they have already been paid for, either because they were paid for in cash at the time, have been inherited or because their mortgages have already been paid off. Another almost half a million (482,000) are rented out as main residences and another 79,000 are transferred or low cost homes.

This data corroborates the fact that Spain is still a country of “owners”. In 2015, 77.3% of households lived in homes that they owned, both with mortgages and without, a percentage that was slightly lower than the 78% seen in 2014. By contrast, the number of households that rent their homes increased from 16.6% of the total in 2014 to 17.5% in 2015.

According to INE, although in the case of homes constructed within the last decade, the proportion is much higher, 28% of households live in homes with mortgages, whilst 48.9% of homes have already been paid for.

Only 91,900 homes were built between 2011 and 2015

INE’s data also reflects the slowdown that the property sector has suffered since 2010. Whilst 1.275 million homes were constructed between 2006 and 2010, during the next five year period (2011-2015), that figure was 14 times lower: 91,900. This shows the decline that the property sector has suffered since the burst of the real estate bubble.

The same phenomenon can also be seen in the number of mortgages signed, which, despite the progress made in 2015, still falls a long way belong the level seen during the bubble. Specifically, in 2015, loans amounting to €25,934 million were signed to buy homes, which represented an increase of 24% with respect to 2014. But that figure falls well short of those recorded in 2006 and 2007, when loans worth €180,000 million were granted. In other words, the house loans signed last year had a combined value that was 7.5 times lower than during the years of the boom.

In addition, INE has identified that housing tenure regimes varies by nationality. In this way, 59.7% of households with at least one foreign member rent their homes, compared with 12% of households in which all of the household members are Spanish.

Original story: El Economista (by Inés Calderón)

Translation: Carmel Drake

Bankia Sells €1,300M Loan Portfolio To Oaktree & Chenavari

6 July 2015 – Idealista.com

As the summer approaches, many financial entities are stepping down on the accelerator to sell their unwanted real estate portfolios as soon as possible. To this end, Bankia has just sold a portfolio known as ‘Project Wind’ to the funds Oaktree and Chenavari, in a mega-transaction worth €1,300 million, which primarily contains doubtful mortgages to individual borrowers.

The transaction actually comprises three different portfolios, which have been shared between the US fund Oaktree and the British fund Chenavari, although according to financial sources, the signing of the sale is still pending:

  1. Portfolio Mast: €918 million of unpaid mortgages from individual borrowers, which has been shared between Oaktree and Chenavari.
  2. Portfolio Board: €178 million of debt backed by real estate collateral, which has been awarded to Oaktree.
  3. Portfolio Find: €216 million of unsecured debt without any real estate collateral. There are lots of lines of credit in this package. It has been awarded to Chenavari.

This transaction follows Bankia’s sale of another portfolio, containing hotel debt, to Bank of America at the beginning of June. That operation, known as ‘Project Castle’, comprised 91 operations, in total, linked to 45 assets. 56% of that portfolio related to doubtful debts.

But Bankia also has another packet of real estate assets up for sale, the so-called ‘Project Big Bang’, which includes a portfolio of residential and commercial assets, as well as land, worth €4,800 million. The bank is very keen to accelerate the sale of that portfolio, which would represent the largest sale of real estate assets since the real estate bubble burst.

CaixaBank is also selling off property

2015 is turning into the year of the large real estate transactions. CaixaBank has put several portfolios up for sale. One of those contains new-builds, known as Project ‘Tourmalet’ and it contains loans secured by 271 completed new residential developments, 160 plots of land and work-in-progress residential developments. The packet is worth close to €1,000 million.

Another package up for sale is the so-called ‘Eurostars’ portfolio containing 1,091 assets, including 807 homes, 253 parking spaces, 26 storerooms and 5 commercial premises. It is worth almost €103 million and the transaction is being managed by the real estate consultancy JLL.

Original story: Idealista.com (by P. Martínez Almeida)

Translation: Carmel Drake