Sabadell sells its Real Estate to Cerberus and 2.5 billion to Deutsche Bank

Sabadell is transferring Challenger and Coliseum portfolios to Cerberus and Makalu to Deutsche Bank. It values its RE in a pricing range around 5 billion and holds a participation to 42%. Still needs the authorization of the Deposits Guarantee Fund (FDG).
Banco Sabadell is selling its RE to Cerberus and Deutsche Bank. The Spanish firm has agreed the transfer of 80% of its awarded assets, appraised in 9.1 billion for 3.9 billion to the US fund. And the last sale of 2.5 billion in Real estate loans from CAM to Deutsche Bank, according to financial sources consulted by Vozpopuli. Neither entities were available for comment.
The agreement with Cerberus, first announced by Vozpopuli, includes two of the four largest portfolios on sale: ‘Challenger’, from the bank’s assets -around 5 billion- and ‘Coliseum’, of assets awarded from CAM, and public aids from the FDG.

As it has notified to the regulator CNMV, Sabadell values these two portfolios in 9.1 billion and it’s selling them to a firm for 3.9 billion, a 42% cut from the initial valuation. Cerberus will have 80% of the new firm, and Sabadell 20%, so the bank is to receive 3.1 billion. The sale demands a provision of 92 million. The platform Solvia has been left out of the agreement.

Agreement with Deutsche

The agreement with Deutsche Bank for Project Makalu is one of the big four portfolios Sabadell had put on sale. It already transferred a portfolio at first, without guarantees -Project Galerna- to Axactor.

Of those four, this one is the largest with real estate guarantees. And it is protected by public aids received by Sabadell in the purchase of the CAM savings bank, at the end of 2011. Thus, this operation, that could be signed in the next few days, requires the agreement of the FGD.
Deutsche Bank has come victor in the purchase of this portfolio, in a hard process in which Oaktree and Lone Star bid harshly. The price of the operation may be around 800-900 million euros, according to market valuations. KPMG has advised on the sale.

The German bank is one of the customary purchasers of this type of portfolios, although it hadn’t acquired one of this size in Spain until now. Last year it landed two operations, one with Sareb, worth 400 million, and another with Caixabank worth 700 million.


After the imminent agreement with Deutsche Bank, Sabadell’s deinvestment team, lead by Jaume Oliu and Simon Castellá will have transferred 12.5 billion in distressed assets to Cerberus, Deutsche Bank and Axactor.

Cerberus’ is the fourth largest purchase in Spain’s history, after Popular’s sale to Blackstone -worth 30 billion, BBVA to Cerberus -14 bn- and Caixabank to Lone Star -12.8 billion-.

Source: Vozpopuli. Translation by Miguel Vinuesa Magnet.

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