Bayerische Hypo- und Vereinsbank AG (HVB) has sold a €960 million non-performing real estate loan portfolio to Goldman Sachs following a competitive auction process. Approximately 60% of the loans come from HVB's Real Estate Restructuring unit (RER). The parties have agreed not to disclose the purchase price.
"With this sales transaction, HVB is successfully continuing its systematic reduction of risk from real estate loans following the sale of two previous portfolio totalling €4 billion to Goldman Sachs. The purchase price achieved in the negotiations is in line with our expectations," said Andrea Varese, Management Board Member of HypoVereinsbank.
Within the framework of this transaction, Goldman Sachs will acquire loans to more than 1,100 HVB borrowers. The portfolio is collateralised approximately equally by commercial and residential properties. The deal is comprised of loans from HVB risk classes 9 and 10.
With this sale, HVB has reached its goal of reducing its RER portfolios to around €5 billion by the end of 2006. This transaction - in addition to the bank's own internal work-out reduction measures with a volume exceeding €6 billion - has thus led to a reduction of more than €10.4 billion in the RER portfolio, which had a volume of more than €15.4 billion at the beginning of 2005.
The sale of the portfolio will be concluded in the first quarter of 2007. The arranger of the deal is HVB Real Estate Structured Products / Mergers & Acquisitions.