Sareb achieves another milestone as investors acquire subordinated debt

Yesterday, Sareb, the Spanish management company for assets arising from the reorganisation of the Spanish banking sector, achieved another of the milestones on its agenda when its current shareholders and new investors subscribed to Sareb’s subordinated debt offer. This means that the total contribution from investors (share capital and debt) now stands at €3.82bn, with Sareb achieving its own-funds target of 25% share capital and 75% subordinated debt.

The 20 companies and institutions that already held stakes in Sareb through the provision of direct capital have now been joined by two insurance companies, Asisa and Mutua Pelayo, which will be exclusively involved in acquiring subordinated debt.

Private investors will hold 55.57% of the total amount of subordinated debt subscribed in the first phase, while 44.43% will be held by the FROB, the government body responsible for restructuring the Spanish banking sector. This means that Sareb has met the objective set out in Spanish legislation (Law 9/2012) of having a majority of private investors and international shareholders.

Santander and Caixabank, two of the main players in the Spanish financial market, are the largest private subscribers to the subordinated debt issue, with 17.12% and 12.37%, respectively, and are also the main private investors in the company as a whole. Banco Sabadell, Banco Popular and Kutxabank (subscribing 6.81%, 5.87% and 2.62%, respectively) are the next-largest private investors by volume of debt subscribed in the issue. The subordinated debt will be allocated as follows:

Senior debt

BFA-Bankia, with 61%, has the largest share of the government-backed senior debt issued by Sareb to exchange for the assets scheduled to be received from the nationalised banks on 31 December 2012. Catalunya Banc and Novagalicia Banco-Banco Gallego are next with 18% and 16%, respectively, while Banco de Valencia holds 5%.

Once this second milestone has been completed, Sareb will continue its start-up and consolidation process. As stated above, 31 December is the effective date of the real estate asset transfer by the nationalised Group 1 banks (Bankia, Novagalicia Banco-Banco Gallego, Catalunya Banc and Banco de Valencia) to Sareb, in line with the planned schedule.