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Spain's SAREB to sell portfolio at 46% discount

Source: Bloomberg - Tue 3rd Dec 2013
Spain's SAREB to sell portfolio at 46% discount

Spain's bad bank will sell 437 Mln of loans taken by Realia Business to Fortress Investment Group for 46% less than their face value, 2 people with knowledge of the matter said.

In addition to the New York-based private-equity firm, at least 8 funds expressed interest in buying the debt from the Madrid-based bank known as SAREB, one of the people said. Both asked not to be identified because the information is private.

The government set up SAREB last year to absorb 50.8 Bln in real estate assets from lenders including the Bankia group that took state aid after the Spanish property market slumped. SAREB has raised 1.7 Bln this year, beating its target of 1.5 Bln, Deputy Economy Minister Fernando Jimenez Latorre said at a conference in Madrid last month.

Realia, Spain's second-largest publicly traded real estate company by market value, reported a 9-month net loss of 17.3 Mln and net financial debt of 2.2 Bln. Last month, the Bankia group and Fomento de Construcciones y Contratas SA, which together own about 58% of Realia, hired Goldman Sachs Group Inc. to seek buyers for their stakes.

Realia rose as much as 2.2% in Madrid trading and was up little changed at 91 cents as of 11:52 a.m. The stock has climbed 21% this year, giving the company a market value of 251 Mln.

A spokeswoman for SAREB declined to comment. A spokesman for Fortress, based in New York, also wouldn't comment.

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