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Sancho Panza

Bailed-Out Spanish Bank Sales Seen Difficult Without More Govt Aid

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NYT 15/11/13

'MADRID — Potential buyers of Spain’s rescued banks, which include foreign investors, are pressuring the government to sweeten sales with more state aid, just as Madrid pulls its financial sector off European support, banking sources said. European finance ministers agreed on Thursday to Spain ending a 41-billion-euro ($55 billion) European rescue program without drawing more funds, after it cleansed weak lenders of soured property assets and began financial reforms.

The aid was only a part of the 100 billion euros offered to plug capital holes in the wake of a 2008 real estate crash.

However, the government may still have to pump more cash into nationalized NCG Banco from Galicia, and Barcelona-based Catalunya Banc, as potential buyers clamor for more protection against losses, bankers familiar with the looming sales said.'

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Can't both be right:

(given I vaguely recall they had 20 years unsold stock or something - I somewhat doubt some of the 'recovery' stuff although I'm sure British buyers freshly confident it's all over in the UK and ready to pick up a bargain will help them shift some units)

I think the buyers are wll aware of the potential downside from here given some of the stories that have circulated regarding Spanish lending pre 2007.

Guru's Blog 13/7/13

'At this height the game, when the Sareb or Bad Bank, only takes a few months, the question we ask is no longer whether the entity obtains the annual yield of between 13-14% on invested capital, but when time going to take before I have to have to ask its shareholders to raise capital again to absorb the losses the bad bank will generate.

Basically the Bad Bank, has to his credit about 107 000 real estate assets and a 90 000 loan, which in turn are secured or collateral about 400 000 real estate assets. Kinks that are being found: Found that of the 400,000 assets that are collateral for loans delivered to the Bank Malo, tens of thousands of them have no address where they are located. Difficult to value a loan when you do not know his side where he is.

The Sareb, accepted without looking loans and assets of entities. Now they have found cases where after reviewing 150 different loans are that they all have the same property as collateral (bank gooool).

Not to mention the keys. Because when you sell a property you're supposed to hand over the keys. The problem comes when you manage real estate assets 107 000 and you find that no one finds the keys or properties were supposed to empty it you are busy.

In short, guarantees that support multiple loans, real estate not know where they are, keys not found, and supposedly empty flats are still occupied, make toxic assets delivered to the Bank Malo, smell worse once they have begun to look which is what we bought decree law for all citizens and now try to sell.

And by the way speaking of sales and business plans. Under the chairmanship of Belén Romana, had planned to sell 45 thousand properties in the first 5 years, about 7,528 in 2013. In theory the first sales of the early years are the easiest because you can knock off more assets you have in portfolio quality, as you still remains the worst crap waiting for a miracle.

Well until June 1 the Sareb had managed to sell 700 properties (in the first 3 months of 2013 had sold 550 properties ). This is what happens when you try to sell premium.

Clearly the pace of sales is very very far below marked on the business plan. With estimated operating costs of 1,700 million euros (cost management costs over the interests of balance financed 92% with debt), does not have to be a whiz to guess, that unless it is a fantasy book scene, Sareb losses in 2013 to be counted by hundreds of millions of euros.

So you may be throwing beads, but I will not give 2014 before the Bad Bank will not have to raise capital for accounting purposes no longer be solvent.'

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Can't both be right:

(given I vaguely recall they had 20 years unsold stock or something - I somewhat doubt some of the 'recovery' stuff although I'm sure British buyers freshly confident it's all over in the UK and ready to pick up a bargain will help them shift some units)

Who knew....?

Foreign funds will soon own 30,000 homes in Spain

International funds (some say vultures) have placed big bets on the Spanish property market in a sudden wave of deals, implying that the best funded investors think we are at a turning point. But it’s not great news for vendors, as it probably means even lower house prices to come.

In the last few months the following deals gone through:

July: Blackstone buy 18 housing blocks from Madrid city council for €125.5 million.

August: Goldman Sachs bought 3,000 rented homes from the municipal authorities in Madrid for €201 million, 20pc more than the original offer price.

August: Kennedy Wilson and Värde Partners agree to buy CXI, the property servicing division of CatalunyaCaixa, a bank, for around €40 million.

August: H.I.G. Capital and it’s division Bayside Capital invest around €50 million in a portfolio of close to 1,000 homes sold by Spain’s bad bank, the Sareb.

September: Cerberus invest up to €90 million in the property servicing division of Bankia, a nationalised bank.

September: Texan fund TPG buys 51pc of the La Caixa Bank’s property servicing firm Servihabitat for €189 million.

September: Baupost group buys 1,000 homes value at €100 million from BBVA (discount not made public).

http://www.spanishpropertyinsight.com/2013/09/23/foreign-funds-will-soon-30000-homes-spain/

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