Bayerische Hypo- und Vereinsbank AG has sold ailing real estate loans with a total volume of about €1.8 billion to Goldman Sachs on the basis of an auction procedure. The parties have agreed not to disclose the purchase price. Within the framework of the transaction, Goldman Sachs will acquire loans extended to more than 3,000 customers of HypoVereinsbank from the bank. Commercial and residential properties account for 46.2% and 53.8%, respectively, of the portfolio sold. The deal is comprised of portfolios from risk classes 9 and 10, known as "nonperforming loans".
The closing of the portfolio sale will take place in the first quarter of 2006. The arranger of the deal is HVB Real Estate Structured Products/Mergers & Acquisitions. Within a short period, this transaction, in conjunction with HVB's own workout efforts, which have led to a reduction of about 2.6 billion, has reduced the portfolio bundled in the Real Estate Restructuring (RER) segment by a total of about one third (4.4 bn), to approximately 11 billion.
"With this initial sales transaction of a subportfolio from the RER segment, HVB is realizing another major step in the reduction of ailing real estate portfolios. The purchase price achieved in the negotiations is in line with our expectations. We are making very good progress toward our goal of rapidly reducing the RER portfolio", said Johann Berger, member of the Management Board of HypoVereinsbank.