Sareb sells €500m of loans to Bank of America, Deutsche Bank

Spanish bad bank Sareb has sold the Fado loan package with a face value of €80 mln to Bank of America Merrill Lynch for an undisclosed discount to value.

The two credit facilities, which have Metrovacesa as borrower, are part of Sareb's 'Operation Bermuda' aimed at reducing the company's exposure to the Spanish listed property sector.

The loans are securitised against the Alvia business park in Pinar de las Rozas near Madrid, as well as the Paseo del Arte and Barceló Manoteras hotels, also located in the Spanish capital.

Sareb's director of financial assets Luis Morenosaid the structure of the sale involving a limited number of assets 'is a very efficient and rapid way to close a sale'. 'We intend to replicate this model in the future,' he added.

Sareb was advised by Cuatrecasas; Herbert Smith Freehills acted for Bank of America Merrill Lynch.

The divestment comes hard on the heels of Sareb's disposal earlier this month of a mortgage loan package with a face value of €323 mln and corporate loans worth €90 mln to Deutsche Bank. The portfolio, known as Abacus, involves a total of 30 loans backed by commercial real estate in Madrid, Cataluña, Comunidad Valenciana and Andalucía.

Sareb was advised by Garrigues on legal issues, HSBC on financial aspects and Irea on strategy. Deutsche Bank was advised by law firm Dentons.

Earlier this year Sareb also finalised its second loan disposal with the sale of a package of syndicated loans with a €245 mln face value to a unit of US hedge fund Davidson Kempner Capital while in May it had divested syndicated loans granted to Metrovacesa for some €35 mln.

Sareb was set up in 2012 following the transfer of some €50 bn of toxic real estate assets owned by nine major local lenders. The new entity bought the bad assets - in large part loans backed by residential real estate - for an average discount of 55%, and financed the operation with treasury bonds.