After the Louvre and Hermitage projects launched in 2020, the Catalan entity has launched the MoMA Project, with which it hopes to sell to opportunistic funds delinquent mortgages valued at 576 million, according to financial sources consulted by El Confidencial newspaper.
The second-largest Spanish group did not comment. These are doubtful mortgages (with more than 90 days of non-payment) that it had already tried to sell before covid-19 was extended, within another larger portfolio known as Tackle, according to the sources consulted.
Although they are pre-Bankia assets, this is the first operation that CaixaBank has put on the market since it absorbed the nationalised entity. The merger has increased the group’s non-performing loans from 8.7 billion to 14.1 billion and net real estate assets (discounting provisions) from 1.1 billion to 2.5 billion. In gross terms, this would be around 4.3 billion. Thus, the group chaired by Goirigolzarri has problematic assets valued at 18.4 billion on its balance sheet, which it needs to lighten before the default derived from the current pandemic crisis picks up.
Even so, the pressure from the European Central Bank (ECB) for all banks to get rid of toxic assets is at its maximum. CaixaBank has therefore decided to speed up this MoMA operation and could be preparing others to close before the end of the year.
This operation covers 5,700 credits from 3,700 creditors who initially requested 576 million, according to information distributed by KPMG to investors. The unpaid amount stands at 495 million. The portfolio is secured by 4,500 properties, which are mainly located in Madrid, Barcelona and Seville, and have a valuation according to the Big Four of 775 million, well above the value of the credits.
The transaction includes some higher quality assets – properties worth more than one million euros – in locations such as Mallorca, Boadilla del Monte, Pozuelo de Alarcón, Costa Brava, Xàtiva and Barcelona. This operation represents a new litmus test for the sector, after a standstill in the sale of unpaid mortgages caused by operations carried out by Sabadell in 2020, according to the sources consulted. Thus, this entity lowered prices to a level that made it difficult for other banks to go on the market, due to the impact it could have on provisions.
Original Story: El Economista | J. Zuloaga
Photo: CaixaBank website
Translation & Edition: Prime Yield