Reuters: Bankruptcy News: Spain's La Caixa puts off big property portfolio sale -sources

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Spain's La Caixa puts off big property portfolio sale -sources Jun 19th 2013, 17:39 By Sarah White MADRID, June 19 | Wed Jun 19, 2013 1:39pm EDT MADRID, June 19 (Reuters) - Spain's La Caixa has postponed the planned sale of a portfolio of 12,000 homes, two sources familiar with the deal said, in a sign Spanish banks are still reluctant to cut prices on property assets even after big writedowns. The Caixa sale fell down on price, the sources said. The bank had hoped to fetch around 1.5 billion euros ($2 billion) for the portfolio. A 2008 real estate crash left Spanish lenders saddled with billions of euros in property and in soured loans to developers. The government last year forced banks to take huge provisions against losses on the assets. The clean-up led Spain to bail out those banks unable to cope and was supposed to make it easier for healthier lenders such as La Caixa to sell devalued properties at big discounts. But banks have shrunk their exposure to property mainly by selling houses piecemeal to individuals, while bulk sales of portfolios are still rare, despite attracting interest from specialised distressed debt funds and international hedge funds. The sources did not detail the size of the bids the bank received for the package, which contained flats and housing in the Spanish capital of Madrid and other big cities, but said they had been far lower than 1.5 billion euros. La Caixa declined to comment. The parallel sale of a stake in its property management arm, Servihabitat Gestion, is progressing well, however, one of the sources said. The process is now in the final phase of non-binding bids, a third source said. "In the property world, it's the sale of the real estate managers that are all the fashion these days," one of the sources said. Buying banks' distressed asset management arms can give specialist investors a platform, complete with staff, through which to buy up and manage properties. Nationalised lender NCG Banco has attracted three offers for its distressed asset unit from foreign funds. Sales of property portfolios have been harder to clinch than those involving other assets such as failed consumer loans, because banks often believe they can recover more money if they hold onto homes and sell them when the market picks up. Bundles of troubled consumer loans on the other hand, which are unsecured, are often completely written off by banks, which then sell them at a fraction of the price. Santander earlier this year sold a package of 300 million euros of soured consumer loans to U.S. hedge fund Elliot Management at a 96 percent discount. Banks are now offering more of these deals, one investment banker in Madrid said, as they also start trying to sell portfolios of credit card debt. ($1 = 0.7461 euros) (editing by Jane Baird) Link this Share this Digg this Email Reprints

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