* Generali, Zurich to invest 5 mln euros each
* Bad bank must raise 5 bln euros in private capital
* Barclays, Deutsche Bank, Axa have also signed up
(Updates with confirmation from Sareb, new details)
By Sarah White and Jesús Aguado
MADRID, Feb 13 Generali and Zurich
are among insurers that will invest in a Spanish bank
set up by the government to manage toxic property assets, as it
raises fresh capital.
The "bad bank," known as Sareb, said in a statement on
Wednesday that it was close to raising the 4.8 billion euros
($6.45 billion) in private capital it needs to handle another
intake of soured assets.
Sareb was set up as part of a 40 billion-euro European
bailout of Spanish lenders that were laid low by a property
crash five years ago.
It got going with about 3.8 billion euros of capital, split
between 25 percent shareholder equity and 75 percent
subordinated debt, after seizing 37 billion euros of troubled
real estate assets from four nationalised lenders last year.
Italy's Generali and Switzerland's Zurich will invest 5
million euros each in the bad bank, two sources earlier told
Reuters. Sareb said the two insurers, along with Spanish peers
Santa Lucia and Reale, would be subscribing to subordinated debt
in the coming weeks.
Spanish utility Iberdrola, meanwhile, has now
become a shareholder along with a roster of healthy Spanish
banks, Sareb said. It is contributing 2.5 million euros to
Sareb's equity, although a source earlier said Iberdrola's could
invest 10 million euros in total in capital, which would include
subordinated debt too.
Though foreign firms are only providing a fraction of
Sareb's capital - mainly provided by healthier Spanish lenders
such as Santander - Spain has been keen to attract
international investors, in part to lend credibility to Sareb.
Britain's Barclays, Germany's Deutsche Bank
and French insurer Axa, which also have a
big presence in Spain, invested in a first phase of capital
raising at the end of last year and are shareholders.
Sareb did, however, rebuff interest from three international
funds recently because they were asking for special terms.
BBVA STEERS CLEAR
Sareb is raising capital again to prepare for the transfer
of assets at the end of February from four mid-sized Spanish
banks, valued at 15 billion euros.
Those will bring total assets under Sareb's management, like
soured loans to developers and housing, to just over 52 billion
Spain needs to keep private capital in Sareb at over 50
percent to reduce the burden on public finances - a target Sareb
said it had achieved.
BBVA is the only Spanish bank that has so far
refused to invest, generating intense speculation in Spain over
its motivations, when other banks were seen to be participating
mainly to help the country overcome its banking problems.
BBVA's Chairman Francisco Gonzalez has only said that the
bank chose not to invest for "technical" reasons.
Sareb has already started selling assets, releasing 13,000
of properties on the market earlier this month. But many aspects
of its structure, including servicing agreements for the assets,
still need to be completely nailed down, and it is also in the
process of revising its business plan.
($1 = 0.7427 euros)
(Editing by Clare Kane and Tom Pfeiffer, Gary Hill)