Santander has entered exclusive talks with Blackstone to sell a 51% stake in a €30 bn portfolio of distressed loans and real estate assets.
The assets were all acquired via Santander's rescue on 7 June of failed Spanish bank, Banco Popular. Santander has said that it plans to sell off the Popular bad assets at a discount up to 40% over three years.
Blackstone is believed to have seen off rival bidders Apollo and Lone Star to get to pole position for a second jumbo non-performing loan deal in Spain. In 2014 the private equity group paid circa €3.6 bn to buy Catalunya Caixa’s Hercules portfolio of largely residential mortgages which had a face value of €6.4 bn.
Europe’s banks still have €537 bn of sour loans and non-core property, according to Evercore's Real Estate Portfolio Solutions team. Santander is the second-largest holder, with €48 bn including the Popular distressed assets. Spain's bad bank Sareb still holds more than €80 bn.
In July, Evercore said that 61% of the €52 bn of live sales it was tracking are Spanish, with the 51% Popular sale the largest. Head of REPS, Federico Montero, said it is ‘good news’ for the Spanish real estate market that Santander had bought Popular and was able to shoulder the necessary provisions and sell.
Morgan Stanley is advising Santander. The Popular portfolio comprises €18 bn of repossessed properties and €12 bn of NPLs.
