Spain’s BBVA Sounds Out Investor Appetite for Two Big Portfolios

 Banco Bilbao Vizcaya Argentaria SA is sounding out investor appetite for two big portfolios of nonperforming debt and real-estate assets, according to people briefed on the potential deals, as Spain’s economic recovery helps banks shed more of their bad loans.

BBVA, Spain’s No. 2 bank by market value, has spoken in recent weeks with investors to gauge their interest in the purchase of a portfolio that could have about €1 billion ($1.12 billion) worth of nonperforming real-estate loans and repossessed property assets and another portfolio that could have between €500 million to €1 billion worth of nonperforming consumer, business and real-estate loans, these people said.

BBVA hasn’t sent investors “teasers”—documents that lay out details of an operation—indicating that the parameters of the potential deals are still being designed, and that the portfolios may not materialize, some of these people said.

One of the people said BBVA could formalize the sale of the two portfolios in September, and that the large size of the potential deals indicates that the portfolios could be partitioned and sold to various investors.

A spokesman for BBVA declined to comment.


The potential sale by BBVA follows efforts by other Spanish lenders to sell real-estate assets. They are encouraged by an economic growth rate—forecast by the Bank of Spain to reach 3.1% this year—that is outpacing that of other major eurozone countries.

Bankia SA has recently received nonbinding offers for €4.8 billion of property, including 38,545 residential units, 4,938 commercial units and 2,589 plots of land throughout Spain, according to a deal document sent to investors by Credit Suisse Group AG in April. Spain spent €22.4 billion in European Union funds to bail out Bankia in 2012.

“The risk perception for Spain has decreased so dramatically that many investors continue trying to increase their positions in our market,” said Patricio Palomar, head of alternative investments at real estate services company CBRE Group Inc. in Madrid.

“You are accessing a market that bottomed out some months ago, so by investing now you are doing it at the very beginning of the next cycle, so you can benefit from the market recovery,” Mr. Palomar said of real-estate investors.

Amid strong demand for Spanish real-estate assets, BBVA has hired KPMG LLP to oversee the sale of its loan-recovery unit, people with knowledge of the potential deal said. For a year the bank has been considering a sale of the unit, which tries to get borrowers up-to-date on their loan payments, but investor interest has grown in recent months, some of those people said.

A spokesman for KPMG declined to comment.

Spanish lender Banco de Sabadell SA sold its unpaid debt management and collection unit last July to Norwegian debt collection company Lindorff Group.

Such major investors as Apollo Global Management LLC and TPG Capital Management have stepped up their presence in Spain’s property market as the economic recovery has helped to buoy real-estate prices in some cities.

Apollo, for instance, bought 85% of Banco Santander SA’s real-estate servicer Altamira in January 2014 for €644 million. Real-estate servicers market and sell properties and real-estate loans, including foreclosures, empty land plots and abandoned developments that Spanish banks accumulated after the country’s real-estate boom went bust in 2008.

Most investors in Spanish banks have cheered the sales, believing that investment funds, such as Apollo and TPG, will be better at managing real-estate assets and recovering payments on foreclosed assets than the banks are.

Blackstone Group also bought the real estate servicer of bailed-out lender Catalunya Banc SA, and paid €3.6 billion to buy €6.4 billion of home loans issued by the bank.

Apollo, TPG, Cerberus Capital Management LP and Sabadell were selected in December by Spain’s “bad bank” to market and sell billions of property assets on its behalf, a contract that brings commissions and insight into the real-estate market.

Investors and analysts expect the real-estate servicers to consolidate in coming years as investment funds continue to seek high returns while they whittle down the amount of foreclosures and bad loans they oversee.

Source: WSJ