Sareb has asked eight bidders to make binding offers for contracts to manage €50bn of distressed loans and assets.
In the first stage of an outsourcing process, Sareb’s board received 46 non-binding offers to manage different combinations of 10 portfolios that comprise its book of assets. KPMG is advising Spain’s bad bank and expects to conclude the selection process in September.
Up to four new managers will be selected, likely based on their matching expertise in various areas as well as price, and they will take over servicing and marketing the assets from 1 January 2015. According to reports in Spanish newspaper Expansion the range of interest in each portfolio ranged from three indicative bids to six.
The loan servicing and asset management activity is currently conducted mainly by a number of private equity firms who over the last 18 months bought up the servicing platforms of the nine Spanish banks whose 10 portfolios of bad loans were transferred to Sareb.
The same parties –Apollo, Blackstone, Centerbridge, Cerberus, Kennedy Wilson withVärde and TPG – are thought to be in the running for the new contracts as is Sabadell Bank.
Sareb holds assets originally nominally valued at €106bn that were transferred at a deep discount from the nine Spanish banks in November 2012. They comprise mainly residential properties, development loans and commercial real estate loans. The book has been split into 10 portfolios, linked to the rescued originating banks which transferred assets: Bankia (two portfolios); NCG Banco; Banco Gallego; Catalunya Banc; Banco de Valencia; BMN; Ceiss; Caja 3; and Liberbank.
Sareb last year forked out €200m for the portfolio’s administration and will be expecting to lower costs through the appointment of new managers.
It has been selling assets steadily this year and recently brought to market its sixth portfolio. This, a €1bn mainly non-performing loan book, known as ‘Project Kaplan’, is backed by residential assets as well as plots of land with a concentration in Madrid, Catalonia and Andalusia.
This brings Sareb’s live portfolio transactions to €1.3bn, and the value of loans and real estate being sold in Spain by all institutions to over €10bn in total, based on Cushman & Wakefield figures. Almost €7bn is a single sale – Catalunya Banc’s residential loans packaged at Project Hercules.