AXA buys slice of Spain’s ‘bad bank’

AXA Spain is making a small investment, of €10m, in Spain’s ‘bad bank’, SAREB. It is likely to inject 20% in equity and 80% in subordinated debt.

The French insurer’s Spanish entity believes it is important for the Spanish financial system to start consolidating and go back to normal business as soon as possible.

It is one of several insurers and private equity firms that has been approached by investment banks hired by SAREB to find investors to take a stake in the vehicle. Others considering the prospect are Cerberus, Fortress and potentially KKR.

The Spanish government has contributed €397m in equity but wants its stake in the vehicle to be less than 50%, ideally. SAREB includes €60bn of bad assets purchased from banks, from property loans to foreclosed assets and development land.