Aareal Bank has sold another portfolio of sub- and non-performing loans (SPLs/NPLs) to Merrill Lynch's Global Principal Investments for an undisclosed sum. Under the deal, Merrill Lynch has acquired loans built up by approximately 250 residential and commercial properties.

Aareal Bank has sold another portfolio of sub- and non-performing loans (SPLs/NPLs) to Merrill Lynch's Global Principal Investments for an undisclosed sum. Under the deal, Merrill Lynch has acquired loans built up by approximately 250 residential and commercial properties.

The transaction reduces Aareal’s NPL portfolio to below EUR 500 mln. Since June 2005, the property bank based in the German city of Wiesbaden has sold five non-performing loan portfolios with an aggregate volume of approximately EUR 2.4 bn.

Chairman Wolf Schumacher said Aareal had completed its strategic restructuring programme in 2006 after just 18 months, rather than the planned two to three years. 'This transaction has strengthened our ability to implement an ambitious growth strategy. The relief on capital from the sales will be invested to generate further highly profitable new business,' he said. Aareal is to outline the growth programme during a press conference today (Monday, 26 March).

Merrill Lynch is one of the most active real estate and distressed debt investors in Germany. It operates in the sector through Merrill Lynch Global Principal Investments (ML GPI).