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Spain’s Bad Bank Says Investors Will Buy 55% of Capital

Spain’s Bad Bank Says Private Investors Will Buy 55% of Capital
Fourteen new investors will join Banco Santander SA and CaixaBank SA as stakeholders in Sareb, the bad bank set up to purge soured real estate assets from the books of lenders. Photographer: Angel Navarrete/Bloomberg

Dec. 18 (Bloomberg) -- Private investors including Spanish banks and insurance companies agreed to purchase 55 percent of the capital in Spain’s bad bank, allowing the government to keep the facility’s debts off its books.

Fourteen new investors will join Banco Santander SA and CaixaBank SA as stakeholders in Sareb, the bad bank set up to purge soured real estate assets from the books of lenders. Deutsche Bank AG and Barclays Plc as well as Bankinter SA, Ibercaja and Mapfre SA, are among the new investors, according to an e-mailed statement from Sareb yesterday.

“I want to thank all those institutions that bought into the capital of the Sareb, because they know perfectly well this is not a matter of one government, but a matter of state,” Economy Minister Luis de Guindos told a parliamentary committee today in Madrid.

Spain is creating the 60 billion-euro ($79 billion) bad bank to help lenders that took state aid such as the Bankia Group jettison real estate assets that soured when the country’s property market crashed. Forming Sareb is a condition of Europe’s bailout of the Spanish banking industry agreed upon in July.

Santander, CaixaBank, Banco Sabadell SA, Kutxabank and Banco Popular Espanol SA will be Sareb’s main investors and Axa, France’s largest insurer, will put in 10 million euros through its Spanish unit, Spain’s bank rescue fund, known as the FROB, said on Dec. 13.

Providing Credibility

The government was trying to get foreign investors to hold about 10 percent in the bank to give the project credibility, Economy Ministry officials who asked not to be named, said on Nov. 16.

The government is keeping its stake in Sareb below 50 percent to avoid having to include it in national accounts. The goal is for the bad bank to operate for as long as 15 years and yield as much as 15 percent a year, Fernando Restoy, chairman of FROB, said in October.

Contributions to Sareb include 431 million euros from FROB and 524 million euros from the private investors in an initial phase, according to yesterday’s statement. Those amounts will increase in a second phase, Sareb said. It didn’t say how much each of the 14 new investors would contribute.

Banco Bilbao Vizcaya Argentaria SA, Spain’s second-biggest lender, isn’t among the investors disclosed.

The private investors will subscribe to subordinated debt issued by Sareb in coming weeks. The initial capital will be comprised of 25 percent equity and 75 percent subordinated debt, according to the statement.

To contact the reporter on this story: Sharon Smyth in Madrid at

To contact the editor responsible for this story: Andrew Blackman at

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