RBS sizes up sale of £1.7bn Spanish loan book

  Royal Bank of Scotland is pondering the sale of its £1.7bn Spanish property loan book, as the market for debt sales by banks heats up.   RBS is understood to have received interest in the loan book, which comprises mainly un­secured corporate debt rather than debt secured against individual assets, and is mulling whether to begin a formal sales process or undertake a quiet off-market deal. Any deal will depend on the discount potential investors demand to purchase a pool of loans to companies in one of the European markets hardest hit by the property downturn.   RBS is known to have lent to several large Spanish developers, including Metrovacesa and Inmobiliaria Colonial.   The Spanish loan book is part of RBS’s £258bn non-core bank, which includes assets and loans no longer considered central to the bank’s business. In order to reduce its giant balance sheet, it has said it will wind down or sell off these assets by 2014. Of these assets, £49.5bn relate to commercial property.   In a presentation to analysts in June, RBS said that 14% of its continental European exposure related to Spanish property, equating to around £1.7bn.   RBS is also in the process of undertaking a £3bn sell-off of non-core UK property loans, in a deal that is attracting interest from large private equity funds. Any Spanish sale would be likely attract to similar parties.   Meanwhile, Credit Suisse is also close to completing the sale of the last $2.3bn (£1.4bn) of its commercial property loan book. US private equity firm Apollo Global Management is understood to be undertaking due diligence on the purchase, in a deal that would see the investment bank exit the commercial property lending arena. The loans were originated before the credit crunch and intended to be securitised, but this market dried up before the bank could sell them on. And debt specialist JC Rathbone also advised on the sale of an £85m loan secured against a 105,000 sq ft London office to private equity firm Westcore Europe. “Over the past 18 months, the property sector has been waiting for the banking community to fully engage with the process of disposing of parts of their loan portfolios,” said Caroline Snowden, JC Rathbone’s head of structured finance. mike.phillips@estatesgazette.com   To access all EGi news stories and commercial property data sign up for a free trial today, or visit the subscription options page to find out more.