Deutsche Bank has emerged as the first winner of a tranche of Project Kaplan non-performing loans from Sareb after the majority Spanish residential-backed portfolio was substantially downsized from an initial €1bn.
The sale of the original €1bn Project Kaplan loan portfolio was launched in July with Sareb substantially downsizing the portfolio after consensus pricing offered by international bidders was below the level at which Spain’s bad bank could afford to sell.
It is not yet clear whether Sareb intends to sell the remaining circa €764m Project Kaplan loans.
Project Kaplan is comprised of performing and non-performing loans linked to small and medium-sized developers. The majority of these loans are secured by residential and land assets throughout Spain with concentrations in Madrid, Catalonia and Andalusia.
Sareb closed a flurry of portfolio sales ahead of the end of 2014, including selling the €133m nominally-valued Project Meridian to Cerberus, the Agatha portfolio in two separate trades to a Hayfin Capital Management-led consortium and to D.E. Shaw.
Separately, Hayfin acquired the €140m Olivia portfolio and Blackstone acquired the Corona portfolio, which is comprised of four office buildings in Madrid for more than €81m.
Spain has returned to economic growth following six to seven difficult years of rising unemployment, salary deflation and depressed consumer spending.
While the Eurozone continues to have economic challenges, Spain benefits from high quality infrastructure and outperformed the Eurozone in 2014, with the third quarter of 2014 being the fifth consecutive quarter of year-on-year growth in GDP in Spain.
The increase in business activity has led to unemployment reducing and consumer confidence has reached its highest level since 2001 with improvements in disposable income and recovering house prices reinforcing this optimism.