Tag: vulture fund

Cerberus to Buy €5M Portfolio from Santander whilst BdE Reviews its Deal with Sabadell

19 September 2018 – El Confidencial

Banco Santander has chosen a buyer for the last portfolio of toxic assets that it still has on its balance sheet. The chosen entity is Cerberus, the opportunistic fund with which the bank chaired by Ana Botín has been holding exclusive negotiations for the sale of the so-called Apple portfolio, which has a nominal value of €5.1 billion, according to confirmation from sources close to the operation. If the deal is closed, the US entity will be the owner of a large part of the real estate business of Santander, BBVA and Banco Sabadell.

The final agreement depends exclusively on locking down the price that Cerberus is offering and that Santander hopes to obtain. The operation could be closed for a price of between €2.8 billion and €3.2 billion, according to the same sources. Banco Santander declined to make any official comment about this information, just like Cerberus. Debtwire, the specialist medium for professionals in financial markets revealed the name of the US fund as the main candidate to acquire this portfolio on 3 September.

If the exclusive talks prove fruitful, Cerberus will fight off competition from Apollo, Lone Star and Blackstone, the other three vulture funds that have also bid for this portfolio of homes, premises and land that Santander foreclosed in exchange for the non-payment of loans by its clients. In theory, the natural winner of the auction was going to be Apollo, which reached an agreement in principle with the Cantabrian bank at the beginning of August for around €2.9 billion.

Nevertheless, that deal fell apart in the middle of last month, to the anger of the fund led at that time by Andrés Rubio, President of Altamira, the real estate company owned jointly by Apollo and Santander since 2013. Rubio left Apollo in the middle of the transaction, which further weakened that firm’s chances of becoming Santander’s natural partner.

With this operation, Spain’s banks will complete the transfer of the majority of the risk linked to the property sector that they still have left over following the financial crisis. In fact, Santander already sold half of the toxic portfolio that it inherited from Popular last summer 2017 – €30 billion – to Blackstone for around €5 billion. Afterwards, BBVA placed almost €13 billion with Cerberus, whilst Lone Star acquired a portfolio worth €6.7 billion from CaixaBank along with its real estate arm Servihabitat.

The most recent high profile transaction announced was the purchase by Cerberus of €9 million of doubtful assets from Sabadell. Nevertheless, that operation is now being reviewed by the Ministry of the Economy given that the Deposit Guarantee Fund is going to have to recognise losses of around €3 billion as a result. That money will go against the State’s own income statement, given that what the Catalan bank, headquartered in Madrid, has sold to the US fund is the former Caja de Ahorros del Mediterráneo (CAM) portfolio, for which it received an asset protection scheme (EPA) (…).

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake

Madrid Court Annuls Sale of 2,935 IVIMA Homes to Azora in 2013

25 May 2018 – El Mundo

Administrative Court number 29 of Madrid has annulled the sale by the Housing Institute of Madrid (‘el Instituto de la Vivienda de Madrid’ or IVIMA) of 32 housing developments, comprising 2,935 homes in total, to the investment fund Azora Gestión, which was completed in 2013.

According to the explanations provided in the court ruling, the award “does not comply with the law” and is not justified by any “supplementary report or analysis of a technical, economic, financial or legal nature”.

The ruling maintains that although the sale of the homes was justified by the statement that “they are not necessary”, no explanation or justification was provided for that claim, even though, according to the court, they fulfilled “a social function, specifically, to provide decent housing for the disadvantaged classes”.

The ruling “reveals that there was a lack of motivation or justification for the unnecessary nature of those promotions, as claimed by the plaintiff (…), to be able to authorise the sale of the assets, which were owned by the Public Administrations”, adds the ruling.

The almost 3,000 homes belonged to the Youth Plan of the Housing Institute of Madrid. They were sold for €201 million, almost 20% more than the established asking price (€168.9 million).

The annulment of this sale is included in the judgement in which the court considers the claim of a resident of Navalcarnero, through which the transfer of his rental contract with IVIMA to a vulture fund has been annulled, and regarding which the option to appeal exists.

The President of the Community of Madrid, Ángel Garrido, argued that the sale of the public homes to an investment fund (which has just been annulled by the judge) “was not a success” and he recalls that his Executive has committed “to never sell public housing to the investment funds”.

“Logically, the interpretation of the ruling lies with the legal services and they will inform us of the appropriate way to comply with it”, he said, before adding that these sales should have never taken place.

Original story: El Mundo (by Roberto Bécares)

Translation: Carmel Drake

Anticipa Has Accepted 2,400 ‘Daciones En Pago’ In 1 Year

18 April 2016 – El Periódico

Anticipa Real Estate, the real estate manager that the fund Blackstone acquired from CatalunyaCaixa, began by purchasing a portfolio of non-performing mortgage loans from the former savings banks for €3,600 million. The portfolio included 40,000 mortgages worth €6,400 million. In addition, it bought portfolios of property developer loans from Sareb and CaixaBank. Since April 2015, when that operation was closed, Anticipa has worked to recover those loans and the underlying collateral – the repossession of the asset -. During this period, it has signed agreements with 3,000 borrowers, of which 2,400 have resulted in ‘daciones en pago’ – “the handing over of homes in exchange for the cancelation of debt” – and 600 have resulted in the renegotiation of the loan, in such a way that the borrowers can make their mortgage repayments, according to Anticipa’s own summary of its first year of management.

The servicer – which is also responsible for managing the real estate assets of CatalunyaCaixa, now BBVA – bought the portfolio on 15 April 2015 and between then and 30 March 2016, it has closed around 400 operations per month. “We have signed 20 operations per day”, say sources at the entity. “And we have prioritised friendly relationships to enable both parties to reach an agreement”. The entity highlights that this process has been carried out whilst maintaining a good understanding with the platforms of people affected by mortgages (PAH), although they acknowledge that there are certain discrepancies with the PAH in Barcelona, which regards Blackstone as a “vulture” fund, even though it is a long-term real estate investor, which is firmly committed to the rental management business in Spain.

Anticipa highlights that it applies the code of good practice under Spanish legislation, whereby those families who have nowhere to go after a ‘dación en pago’ are offered social housing. In fact, 25% of the borrowers of the 40,000 mortgages pay their monthly instalments on time. Anticipa sends out an invoice each month and collects the corresponding funds. Of the remaining 75%, some (25%) of the borrowers pay intermittently and the rest (50%) do not pay at all. The company prioritises enabling those borrowers who pay intermittently to become regular payers, through the refinancing of their loans. “We apply a partial discount, we amend the term, the interest rate and the loan principal, to reduce the instalment and whereby facilitate the payment”, explains the entity.

Case by case analysis

If the borrower is still unable to pay, he is offered a ‘dación en pago’, and the remaining debt is cancelled in most cases. “Each case is analysed on an individual basis”. Anticipa helps the borrower to find a home if he has to leave or offers him a property to rent “at market price” or by means of “social housing”, as appropriate.

The entity does not rule out mortgage foreclosures when there is no other way of reaching an agreement with the borrower…But, “we have not carried out any evictions”, say sources at the entity…and the objective is to negotiate in order to avoid eviction in all cases”, they add.

Anticipa, led by Eduard Mendiluce…employs 360 people, of which almost 150 are dedicated exclusively to negotiating with borrowers. (…).

Original story: El Periódico (by Max Jiménez Botías and Olga Grau)

Translation: Carmel Drake