Bloomberg News

Spain Bad Bank Said to Snub Funds From Firms Including Cerberus

February 08, 2013

Spain’s bad bank turned down an offer by three private-equity firms including Cerberus Capital Management LP to invest in its shares because they sought preferential terms, a person familiar with the information said.

The decision to turn down the investment proposal by Cerberus, Centerbridge Partners LP and Fortress Investment Group LLC had the support of the so-called troika, or European Commission, European Central Bank and International Monetary Fund, said the person, who asked not to be identified because the information isn’t public.

Spain set up a so-called bad bank known as Sareb under the terms of a European bailout for its banking system to absorb the soured real estate assets of nationalized lenders such as the Bankia group. Sareb, which took on 37 billion euros ($49.4 billion) of assets in December, is seeking an annual return on equity of as much as 15 percent as it buys foreclosed real estate at an average discount of 63 percent.

Tim Price, a spokesman for Cerberus, wasn’t immediately available for comment when contacted by telephone by Bloomberg News. Officials at Fortress and Centerbridge didn’t immediately respond to messages.

News of the rebuff was reported earlier today by Spanish newspaper Expansion.

To contact the reporter on this story: Frank Connelly in Paris at fconnelly@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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