Bloomberg News

Commerzbank Spain Loans Said to Get Bids Over $4.2 Billion (1)

March 18, 2014

Commerzbank AG (CBK)’s Spanish real estate loans are attracting offers of more than 3 billion euros ($4.2 billion), two people with knowledge of the matter said.

Investors including Lone Star Funds and Blackstone Group LP (BX:US) are expected to have until April 5 to submit final bids for the loans secured by Spanish property, said the people, who asked not to be identified because the information isn’t public.

The loans have a face value of more than 4 billion euros and Frankfurt-based Commerzbank is trying to sell the portfolio, named Project Octopus, before June 30, according to the people.

Germany’s second-largest bank is winding down its real estate financing arm and selling loans to focus on business and consumer banking after it received an 18.2 billion-euro bailout in 2009 from the German government, which now owns a 17 percent stake. Commerzbank’s shares have more than doubled from a July 2013 trough on speculation that the bank is getting a grip on its finances after five capital increases in four years.

Lone Star is bidding with JPMorgan Chase & Co. (JPM:US) for the Octopus loans, while Blackstone is paired with Deutsche Bank AG (DBK), and Apollo Global Management LLC (APO:US) is teaming with Banco Santander SA (SAN), the people said. Spokesmen for JPMorgan, Blackstone, Deutsche Bank, Lone Star, Apollo and Santander all declined to comment. Nils Happich, a spokesman for Commerzbank, also declined to comment.

Commerzbank’s commercial-property loans in Spain, which are both performing and nonperforming, totaled 4.8 billion euros at the end of December, according to the bank’s fourth-quarter results. Commerzbank sold 5 billion euros of U.K. property loans to Wells Fargo & Co. and Lone Star in July at a 3.5 percent discount to book value.

To contact the reporters on this story: Sharon Smyth in Madrid at ssmyth2@bloomberg.net; Neil Callanan in London at ncallanan@bloomberg.net

To contact the editors responsible for this story: Andrew Blackman at ablackman@bloomberg.net Ross Larsen, Jeff St.Onge, Andrew Blackman


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