Spanish lender Ibercaja has sold a portfolio of 505 property developer loans to Fleta Issuer Holdings Designated Activity Company for €489 mln, in a bid to clean up its toxic assets.
The portfolio represents around 36% of Ibercaja's bad loan portfolio, enabling the bank to reduce its default rate to below 8%.
43% of the portfolio sold comprises loans granted to finance land purchases, marking a record divestment of loans of this kind.
The bank said that several 'first rate' investors and international institutions participated in the competitive process to sell the loan portfolio. The operation, dubbed Fleta, is part of its corporate strategic plan for 2015-17 to optimise its balance sheet.
In parallel, Ibercaja said it had increased the amount of loans for new development projects, tripling the number of homes it had financed in 2016 with respect to 2014. In the last three years, it has financed 150 new projects, mostly in Madrid, Barcelona and Zaragoza.
