Bank of America is reportedly in final talks to buy real estate loans with a nominal value of about €400 mln from Spanish state-owned lender Bankia.

Bank of America is reportedly in final talks to buy real estate loans with a nominal value of about €400 mln from Spanish state-owned lender Bankia.

According to a press report by news agency Bloomberg, the loan package, called Castle, is secured by Spanish hotels and will probably be sold for less than the nominal value of the borrowings.

Spanish lenders are pushing the gas pedal on their non-core property disposals to take advantage of the strength of the investment market.

Bankia is offering the largest and most diverse portfolio through Credit Suisse. The package, valued at €4.8 bn, consists of €3.3 bn of residential units, €1.1 bn of commercial units and €400 mln of land.

In addition, Bankia is awaiting bids for its Wind Project package consisting of 4,300 of mortgage loans with a nominal value of €900 mln.

Record sales
Banco Popular is also accelerating its non-core property disposals. According to Spanish newspaper Expansion, the lender is preparing the sale of €451 mln in real estate assets including 1,473 homes in Madrid, Barcelona, Toledo and the Costa del Sol, 13 hotels, and land plots.

In comments to the press, Banco Popular recently noted that sales are now being closed at levels more similar to book values, making disposals all the more interesting for banks.

Popular closed €534 mln of property sales in the first quarter of 2015, up 115% on €249 mln in the same period a year earlier.

Similarly, CaixaBank is approaching investors for its Tourmalet Project comprising €800 mln of loans to local developers and the More Project consisting of €780 mln in bad loans. According to C&W, the bank is also looking to sell Project Bridge, Port and Tower for another €1.3 bn.

Meanwhile, Banco Sabadell has started the sale of 5,000 apartments valued at €600 mln in the so-called Empire Project while Santander is looking to divest €170 mln in hotel debt in the Formentera Project.

Banco Mare Nostrum is working on the €200 mln Neptune project as well as the so-called Pampa mortgage loan portfolio.

According to research by C&W Corporate Finance, Spain accounts for over a third of live sales. 'Although Sareb, the Spanish AMA, does not currently have any notable portfolios in the market, both CaixaBank and Bankia have filled the space. Once again, this highlights the incredible turnaround in the Spanish real estate market over the past two years and the attempt of vendors to take advantage of the current high levels of investor sentiment,' the broker recently said.