“We designed an innovative structure with multi-layered benefits to sell Catalunya Banc: The carve out of the residential loan portfolio exposure and the subsequent sale of the rest of the bank”
Alantra’s Credit Portfolio Advisory (CPA) and Investment Banking teams set to work. We designed an innovative structure with multilayered benefits to sell Catalunya Banc: The carve out of the residential loan portfolio exposure and the subsequent sale of the rest of the bank. This was a complex transaction which involved a collaboration between our CPA, banking and real estate M&A teams, which played to our strengths in the mid-market. We conducted a two-stage process:
- Stage one: Sale of the residential loan portfolio to Blackstone. This was one of the largest mortgage portfolios in Europe at the time with a face value of €6.5bn. Our team segmented it to account for the delinquency status of the credits between performing loans, worth €2.5bn, sub-performing loans, worth €1.1bn and non-performing loans, worth €1.3bn. The consortium, formed by Blackstone, offering €3.6bn, and FROB, offering €600m, was selected as the final buyer of the portfolio.
- Stage two: Sale of the healthy bank to BBVAThe strategy created by Alantra’s team significantly improved the bank’s balance sheet ratios and created more flexibility in the restructure process including the size of the balance sheet, reducing dependence on the European Central Bank (ECB) and increasing efficiency which ultimately reduced the risk of the bank failing. Furthermore, this part of the project resulted in greater competition and therefore a better outcome in both sale processes, of the residential loan portfolio and the healthy bank. We had more than 40 candidates interested in the loan portfolio and the sale of the bank attracted greater interest as a result, as a better-balanced entity.