“Apollo, which bought Banco Santander SA ’s real-estate service in January, will manage the disposal and sale of 44,089 properties and real-estate loans worth about €14 billion over seven years…

…Sareb selected Haya Real Estate SA, owned by Cerberus, to market and sell 52,168 property loans worth about €18 billion over the next five years…. TPG, which owns 51% of a servicer previously held by Spanish lender Caixabank SA, has been selected to manage the sale and disposal of 30,342 properties and real-estate loans worth €9.2 billion over seven years.”, Jeannette Neumann, “Spains Bad Bank Picks Apollo, TPG and Cerberus to Sell Assets”, Wall Street Journal

“The Lehman bankruptcy trustee took several years to allow markets to recover (from the 2008/2009 crisis) before selling assets. So did the Federal Reserve with the billions in assets they obtained from Bear Stearns bailout and sale to JPM. And so has the government, with its TARP investments, investments in GM, AIG, etc. And you see the Spaniards are doing the same with their crisis era assets. Why in the world does the Federal Deposit Insurance Corporation, as conservator of the deposit insurance fund (with a duty to mitigate losses) and receiver of failed banks, almost immediately fire-sell the assets (and/or operations) they obtain, when they seize a troubled bank? That’s what they did when they seized IndyMac Bank on July 11, 2008 and sold it into the teeth of the downturn less than six months later. At a time when then FDIC Chair Sheila Bair was quoted in the New York Times saying markets were irrational. Why would she have sold IndyMac Bank into an irrational marketplace, rather than letting the markets recover like every other wise receiver or trustee (who is trying to mitigate losses and maximize value) does? Think about it, why does the FDIC prohibit the buyers of a bank from selling it within the first three years? I can think of only one reason. They don’t want to be embarrassed if these private investors are able to quickly “fix and flip” the institution or assets at a big profit. I am convinced that if the FDIC had taken IndyMac Bank through receivership, paid off IndyMac’s post-receivership liabilities, and prudently wound down IndyMac’s assets over time; they would have avoided billions in losses to the insurance fund. I don’t see how anyone can objectively tout the FDIC’s capabilities as a receiver?”, Mike Perry, former Chairman and CEO, IndyMac Bank  

Europe Markets

Spain’s Bad Bank Picks Apollo, TPG and Cerberus to Sell Assets

Property Assets Totaling $50.48 Billion to Be Sold

By Jeannette Neumann

MADRID—Spain’s “bad bank” said Thursday it had chosen major investment firms Apollo Global Management LLC, TPG Capital Management and Cerberus Capital Management LP to market and sell about €41 billion ($50.5 billion) worth of property assets on its behalf.

The job will give the three U.S. firms commissions and insight into Spain’s recovering real-estate market. The bad bank, known by its Spanish acronym Sareb, chose Spanish bank Banco de Sabadell SA last month to manage the disposal of assets worth about €7 billion.

Apollo, which bought Banco Santander SA ’s real-estate service in January, will manage the disposal and sale of 44,089 properties and real-estate loans worth about €14 billion over seven years, the bad bank said. Apollo’s portfolio includes real-estate assets that were transferred to Sareb by banks including bailed-out lender Catalunya Banc SA.

Sareb selected Haya Real Estate SA, owned by Cerberus, to market and sell 52,168 property loans worth about €18 billion over the next five years.

Those loans were originated by Bankia SA, Spain’s largest bailed-out lender.

TPG, which owns 51% of a servicer previously held by Spanish lender Caixabank SA, has been selected to manage the sale and disposal of 30,342 properties and real-estate loans worth €9.2 billion over seven years. TPG’s portfolio includes real-estate assets that had been on the books of banks including bailed-out lender NCG Banco SA.

The three investors beat out Centerbridge Partners LP, which had made it to the final round of bidding, according to people involved in the process.

Blackstone Group LP had expressed interest in the job at an earlier stage. The private-equity giant has its hands full in Spain after it bought around 40,000 mortgage loans in July from Catalunya Banc, which cost Spanish taxpayers €12 billion in a 2011 bailout.

Sareb was created in November 2012 as a depository for the most-troubled Spanish banks to unload €51 billion in risky real-estate loans, residential foreclosures, unfinished commercial properties and undeveloped pieces of land.

Nine Spanish lenders transferred nearly 200,000 real-estate-related assets to the bad bank. Since then, these banks have also been marketing and selling properties and loans on behalf of the bad bank.

The three investment funds and Sabadell will take over the management of those properties from those banks on Jan. 1, a change aimed at diminishing perceived conflicts of interest. The banks that have been managing Sareb’s assets are also trying to unload their own real-estate assets that weren’t transferred to the bad bank.

The value of the properties and loans to be managed by the three funds and Sabadell is based on the value of those assets when they were transferred to Sareb, meaning their value could have changed.

Posted on December 9, 2014, in Postings. Bookmark the permalink. Leave a comment.

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