Spanish Mortgage-Backed Bond Manager to Liquidate Two Issues

Titulizacion de Activos SGFT, a Spanish manager of securitizations, said it will liquidate two mortgage-backed bond transactions because of the high default rates and low recovery values on the underlying loans.

TDA 25 Fondo de Titulizacion de Activos and TDA 28 Fondo de Titulizacion de Activos, special purpose companies set up to issue mortgage-backed debt, have “grave and permanent financial imbalances,” the manager said in regulatory statements. Titulizacion de Activos SGFT will manage the assets to “optimize” recoveries for bondholders, according to the Oct. 18 filings.

The two transactions include a pool of home loans originated by Credifimo, a lender controlled by Banco Civica, which was bought by CaixaBank (CABK) earlier this year. The issuers’ senior notes, sold with the top ratings from Standard & Poor’s and Fitch Ratings before the financial crisis, are now graded CCC, according to data compiled by Bloomberg.

TDA 25, which issued five portions of bonds with different ratings and returns in 2006, has 152.7 million euros ($199 million) of notes outstanding, data compiled by Bloomberg show. TDA 28, created in July 2007, has 338.1 million euros of outstanding securities.

Titulizacion de Activos SGFT is a manager of transactions set up in 1992 by a group of banks to centralize the management and servicing of securitization activities in Spain. JPMorgan Chase & Co and Bankia group are among existing shareholders.

To contact the reporters on this story: Esteban Duarte in Madrid at;

To contact the editor responsible for this story: Paul Armstrong at

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