Cajamar reaches an agreement with Hoist in its plan to sell NPL

The entity continues with its intention to get rid of difficult-to-collect assets and has found an ally in the Swedish bank fund, which has recently closed similar operations with Banco Sabadell.

In the midst of the debate on what will happen to non-performing loans (NPL) in the face of rising interest rates, banks are starting to sell off their portfolios of doubtful loans. Cajamar has joined this trend and has closed several deals in recent months, the latest of which was with the Swedish fund Hoist, a subsidiary of the bank of the same name and a usual suspect in this type of operation. The portfolio for sale, in which the law firm Uría Menéndez has participated, was christened Mesana and included secured and unsecured loans and foreclosed assets after a foreclosure process (REO, in financial jargon), according to sources consulted by La Información. 

With this operation, Cajamar continues the NPL clean-up plan undertaken in recent months. In the presentation of its quarterly results, the entity chaired by Eduardo Baamonde revealed that in September it closed a similar operation for the Ostende portfolio, with a gross book value of 703 million euros, although it did not reveal the name of the purchasing party. This type of sale has led the entity to reduce its NPL portfolio by 310 million euros (-22%).

The buyer of Project Mesane, the value of which has not been disclosed, is the Swedish fund Hoist, a subsidiary of a bank of the same name. It is a regular player in this type of operation and has once again come to the forefront of the sector after having closed a recent operation with Banco Sabadell, in which the Catalan bank opened a competitive process and had KKR as the second interested party. Before the outbreak of the pandemic, Hoist has been interested in similar purchases, such as Banco Santander’s mega-portfolio for the Old Trafford project.

Like the Swedish entity, other institutional investors have also entered the Spanish market. This is the case of Kruk, Axactor and EOS, which last September shared out Caixabank’s largest portfolio of problematic assets after the pandemic. The German company EOS kept most of it, while the other two parts of the portfolio were divided between Axactor and Kruk. The former was awarded the SME debt and the latter, which in previous months had done the same with debts from Cetelem and Carrefour’s finance company, focused on consumer credit debt.

Pending delinquency

The portfolio acquired from Cajamar comprises three types of assets. On the one hand, secured and unsecured loans and, on the other, REOs (real estate owner), which are foreclosed assets after a foreclosure process. The transaction comes amid expectations about what will happen to delinquency rates. Cajamar’s is below the sector average, according to the company’s own data, which shows an improvement compared to recent months, in view of the data compiled up to March by Alvarez & Marsal. 

Original Story: La Información | Cristian Reche 
Photo:Cajamar Sede Social – website
Translation and Edition: Prime Yield