Catalunya Banc launches sale of Project Hercules residential loan portfolio

Catalunya Banc, the Spanish State-owned retail bank, has launched the sale process of Project Hercules, which is comprised of three sub pools of Spanish residential loans tranched by performance.

catalunyacaixa logoProject Hercules has an outstanding loan balance of €6.9bn, secured by a granular portfolio of almost 112,000  predominantly secured residential mortgages weighted towards Cataluña, with a carrying value of €9.7bn, reflecting an overall 69% LTV.

Project Hercules is tranched into three sub-pools, according to loan pool performance, as follows:

  • Tranche A: €2.9bn secured by just under 46,000 performing residential mortgages for which the collateral has a carrying value of €4.4bn;
  • Tranche B: €1bn secured by just under 14,000 subperforming residential mortgages for which the collateral has a carrying value of €1.7bn;
  • Tranche C: €3bn secured by around 52,000 non-performing residential mortgages for which the collateral has a carrying value of €3.7bn.

N+1, a Spanish loan sales advisory firm, is selling Project Hercules.

CoStar News understands that a restricted number of parties have been invited to pitch for the sub-pools separately or combined which is expected to have included Blackstone, which confirmed last week its purchase of Catalunya Banc’s real estate servicing platform for €40m. The lender’s bank-branches carry the name CatalunyaCaixa.

In addition, Lone Star, Cerberus, Kennedy Wilson and Apollo are all expected to be among the invited bidders.

The geographic spread of the near 112,000 Spanish homes is split 72% towards Cataluña; followed by 9% in Valencia; 7% in Madrid; 4% in Andalucia; 2% in Murcia and 1% in Castilla La Mancha.

The Project Hercules dataroom will open on Monday (21 April), with non-binding bids due 19 May.  Catalunya Banc is seeking to trade Project Hercules by the end of June.

Catalunya Banc is considered a motivated seller as part of the Spanish government ambition to re-privatise the retail bank.

All parties declined to comment.

Last week, Blackstone in partnership with Magic Real Estate acquired CatalunyaCaixa Inmobiliaria, the real estate asset management platform of CatalunyaCaixa for at most €40m.

The platform includes loans as well as CX’s foreclosed real estate assets and those the bank transferred to SAREB in 2012.

CatalunyaCaixa was the first bank in Spain to address divestment of 100% of its real estate platform, attracting huge interest from a large number of mostly international institutional investors.

With this sale CatalunyaCaixa has taken another step forward in the divestment of non-strategic operations, which are not part of its banking business in line with the restructuring plan approved by Brussels.

CatalunyaCaixa said in a statement last week: “The speed of the sale enables the divestment of the property management structure prior to commencement of the sale of the financial institution itself and in line with its strategy to focus its operations on retail banking.”

CXI sold or let 6,000 properties worth €680m in 2013.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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