Foreign investment funds approach the Spanish bad bank

Spanish bad bank

The US funds Apollo, Lone Star and Blackstone would be about to purchase the first assets from the portfolio launched by the Spanish estate-organised bad bank Sareb. The portfolio has been valued at some €200 million and includes 38 houses located in the regions of Valencia and Andalucia, as well as a group of buildings whose construction is ongoing. The transaction has received the name of Project Bull.

This information was first published last month of May by Bloomberg, and was collected on Sunday by the rest of the Anglo-Saxon financial press, which added that the flow of deals with Sareb has been zero so far, but this should be the opening of the doors for a lot of transactions.

Sareb has not made any statement regarding the Bull portfolio. When asked by The Corner to explain if the mentioned deals with the US funds are firm or not, the authorities referred directly to Belén Romana’s words, the institution’s president, who last week confirmed that “from a commercial point of view, we have improved a lot with the opening of the three different channels; the retail, the wholesale and the singular assets ones.”

Romana also added that Sareb had just launched “its first portfolio into the wholesale market. We are convinced that our steps move in the correct direction, and also satisfied with the company’s evolution in this initial months.”

From the moment that Sareb was born as a consequence of Spain’s financial system successive reforms, the so called “vulture funds” have set eyes on it. Last February, they asked to enter the bad bank capital and also participate in the management of its real state assets, but the proposal was rejected because they demanded very aggressive cut prices which could have generated some “privileges” among the stakeholders, as then said Sareb officials. Indeed, the funds’ intention was to take the capital increase that Sareb was preparing to absorb toxic assets from the rescued but not yet nationalised Spanish entities. The national financial sector, banks and insurance groups answer was no.

However, just a couple of months later those international investors voiced that they were still interested in Sareb assets, and would come back again. Now the launching of the Bull Project seems to confirm they really will.

Houses and building land owned by Sareb are valued at €90 billion to be sold in 15 years. At the end of this period, the company will be terminated. They plan to sell about 45,000 properties, half of those during the next five years. The bad bank expects to disinvest €1,5 million through the present year.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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