Deutsche Bank offloads €430m of Spanish NPLs

Deutsche Bank’s Spanish arm has completed the sale of a non-performing loan portfolio with a face value of €430 million, significantly reducing its non-core loan book in the country.

The portfolio contains residential mortgages as well as SME debt and structured credits which were held in the non-core operating unit.

Deutsche Bank did not disclose the identity of the purchaser, although Spanish newspaper Expansión cited sources familiar with the sale process as saying that Oaktree Capital Management is the buyer.

In a filing to the Spanish National Securities and Exchange Commission, Deutsche Bank Sociedad Anónima Española (SAE) said that the deal was signed on the 19 October and that the sale was in line with its strategy to substantially reduce its assets in the non-core division before the end of this year. It added that the sale enables Deutsche Bank SAE to save costs in resources devoted to managing this portfolio and reduces capital needs.

Oaktree has been a significant buyer of loan portfolios in the Spanish market. In July 2015, it partnered with hedge fund Chenavari to buy Bankia’s €918 million Portfolio Mast, which comprised 4,300 unpaid residential mortgages. Oaktree also bought the €178 million Portfolio Board, which contained loans to SMEs and real estate developers, secured on commercial property assets. The sales formed part of Bankia’s Project Wind non-core disposal programme.

In June 2015, Oaktree bought the Project Gaudi loan portfolio from German bad bank FMS Wertmanagement. The portfolio consisted of 16 of FMS’s 18 Spanish CRE loan positions and assets. Oaktree bought the bulk of the loans for around €260 million, after purchasing the largest asset in the portfolio – Bilbao’s 1.35m sq ft Megapark Barakaldo – for about €150 million.

Oaktree was the second largest European real estate loan buyer, after the joint venture between Lone Star and JP Morgan, in the year to September, according to investment banking firm Evercore’s research. The firm bought Projects Ruby and Emerald from Ireland’s National Asset Management Agency in June.

Evercore said in September that Spain has around €13 billion of live and planned non-core real estate sales, a fraction of the €189 billion outstanding.