U.S. private equity firm Blackstone Group has reportedly won the auction for 6.4 billion euros worth of mortgages underwritten by Catalunya Banc, a process that was dubbed “Project Hercules.”
Blackstone bid around 3.5 billion to 3.6 billion euros for the loans, sources told Reuters. Catalunya Banc was nationalised in the wake of the property crash and FROB, the agency that controls nationalized Spanish lenders, has been seeking a buyer for the bank, without success.
Blackstone is gambling that the property backed by the mortgages will recover their value as the Spanish market improves and owners will continue to pay their mortgages. The assets purchased by Blackstone consist mostly of residential mortgages in Catalonia, Bloomberg reports. About 1.1 billion euros worth of mortgages in the package are “subperforming,” or up to 90 days overdue, and 2.7 billion are nonperforming, or more than 90 days overdue, according to the Wall Street Journal coverage.
Several U.S. firms active in Spain were reportedly interested Oaktree Capital Group, Lone Star Funds and Apollo Global Management. U.S. funds have been the most active buyers in Spain real estate assets, Cushman & Wakefield recently reported.
FROB hopes to complete the sale by the end of the month, a spokeswoman told Bloomberg.
