Banco Santander is releasing more unproductive assets from an old acquaintance. The bank has sold unsecured re-performing loans (RPL) to individuals and SMEs to US fund Balbec Capital for a total of around 90 million euros, market sources told elEconomista.es.

The structure of the sale is unique, as the company will continue to service the current loans, along with other mechanisms to avoid any reputational risk with clients and is linked to an agreement that guarantees the fund the future purchase of the loans that may go unpaid.

“Re-performing debt consists of healthy financings that have been restructured or defaulted in the last year and has become an asset that is increasingly important in the portfolio sales market.

Despite the fact that they are current, the fact that they have suffered payment incidents or have been restructured implies a consumption of provisions for the banks, which see an incentive to transfer the risk in the possibility of reducing this burden, although they usually retain their management due to the link with the client. In fact, many transactions are carried out through securitisation, which allows the risk to be deconsolidated while maintaining this link.

Santander relied on Alantra for the operation now being completed, a consultant it has also used this year to carry out the Turf and Frankel projects, and in previous years for the sale of the Model and Titan projects, among others.

Original Story: El Economista | Author: Eva Contreras
Edition and translation: Prime Yield