* Close to selling loans to Lindorff and AnaCap -source
* 1.14 bln eur portfolio contains distressed consumer loans
* Other banks eyeing similar deals as prices drop - bankers
* Popular debt buyback will also help it bridge capital gap
(Adds details of capital gains, debt buyback result)
By Jesús Aguado and Sarah White
MADRID, Dec 12 Spanish lender Popular
is finalising the sale of a 1.14 billion-euro ($1.5 billion)
portfolio of distressed consumer loans, as the country's banks
start clearing their books of troubled assets.
Popular, which unlike some other Spanish banks has not
tapped European aid even though it failed a September stress
test on its finances, is close to selling the loans to Nordic
distressed debt group Lindorff and financial services-focused
private equity firm AnaCap, a source familiar with the matter
Popular said no deal had yet been signed and declined to
give details on any possible sale, though the source said the
deal could be formalised later on Wednesday.
Such portfolio sales, including troubled assets or corporate
loans, are starting to gather pace in Spain, as lenders scramble
to shore up capital following a five-year-old property downturn.
Popular shrank its capital gap with a 2.5 billion euro ($3.3
billion) rights issue of new stock completed in early December.
All banks have made provisions for losses on toxic real
estate loans or foreclosed properties, which should help them
withstand sales of these types of assets at big discounts, which
many had so far been resisting.
More deals in the property sector or on other portfolios
such as consumer loans are likely to take place early next year,
bankers in Madrid said.
"There is a lot more investor interest," said one banker,
adding that private equity firms or distressed debt specialists
such as U.S. groups TPG and Fortress were among those eyeing
Spain. Other advisers on such deals have previously cited those
firms among potential bidders for Spanish assets.
"The difference between the bid and the ask price has
narrowed a lot," the banker said.
The portfolio shed by Popular, of troubled consumer loans
including to immigrant clients, was completely provisioned for,
meaning the bank will not take an additional hit even if they
are sold at a discount to their original face value.
The total price paid was not immediately clear, though the
source familiar with the matter said Popular could actually book
a gain of over 30 million euros from the sale.
Popular also completed a buyback of various securities on
Wednesday, which will yield capital gains of 45 million euros,
the source said.
Both deals will bring the bank closer to booking the 300
million euros in capital gains it is eyeing for 2012, after
already raising 124 million euros towards that in the first half
of the year.
Popular had a capital gap of 3.2 billion euros, according to
an independent audit of the bank in September evaluating how
lenders would weather a serious downturn, though its recent
rights issue went some way towards bridging that.
Popular said on Wednesday that 154.8 million euros, or 10.8
percent of institutional bondholders, had accepted a buy-back
offer for subordinated, preference shares and securitised debt
instruments worth up to 1.43 billion euros.
Distressed funds typically look to pick up toxic loans at
rock bottom prices, while until recently banks had been
reluctant to contemplate selling anything below 50 percent of
face value, banking sources said.
But like peers across Europe, Spanish banks want to shrink
their bloated balance sheets, to help them meet stricter global
They are also contemplating sales of healthier loans as a
result. Spain's biggest bank, Santander negotiated the
sale of 2.5 billion euros of a mixed bag of loans to Bank of
America Merrill Lynch in October.
Number two bank BBVA had by then sold about 1
billion euros of loans on an individual basis in 2012, sources
($1 = 0.7693 euros)
(Additional reporting by Robert Hetz; Editing by David Holmes
and Helen Massy-Beresford)