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Spain's 'bad bank' sells loan bundle to Bank of America

Source: Reuters - Mon 25th Nov 2013
Spain's 'bad bank' sells loan bundle to Bank of America

Bank of America Merrill Lynch has bought a small package of loans from Spain's so-called 'bad bank' SAREB, helping the vehicle to surpass year-end sales targets, 2 sources familiar with the situation said on Monday.

The U.S. bank bought two loans to troubled property company Metrovacesa, the sources said, adding that the loans were on SAREB's books at about €80 Mln.

Both SAREB, which was created at the end of last year to cleanse the Spain's rescued banks of their soured property loans and real estate, and Bank of America declined to comment.

SAREB has sold nearly €900 Mln of loans linked to major property companies so far this year, though it is unclear how much it has actually received in payment.

The loans that used to sit on rescued banks' books were transferred to SAREB at varying discounts. SAREB is 49%-owned by the government, with the remainder mainly shared between Spanish banks that did not need rescuing.

SAREB, which also sold Metrovacesa loans to Deutsche Bank this month, is selling another package of loans belonging to real estate group Realia to U.S. investment firm Fortress and Spain's Azora, one of the sources said.

The bad bank's total sales this year have reached about €1.7 Bln, against a 2013 target of €1.5 Bln. Much of this is down to houses sold to individuals, though portfolio sales to professional investors are picking up.

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