July 15, 2014 / 6:35 PM / in 4 years

Blackstone, Oaktree vie for Catalunya Banc's mortgages -sources

MADRID, July 15 (Reuters) - Spain is likely to sell Catalunya Banc’s mortgage portfolio this week to either private equity firm Blackstone or a consortium led by California-based Oaktree, three sources with knowledge of the matter said.

The sale is aimed at slimming down Catalunya Banc as FROB, Spain’s bank restructuring fund, starts its third attempt to return the small Barcelona-based bank to private hands. The portfolio initially attracted 12 bids, including groups led by Goldman Sachs and Cerberus.

The package of mostly performing mortgages, one of the biggest of its kind ever sold in Europe, is worth 6.4 billion euros ($8.9 billion) and could be backed with state funds.

The Oaktree group includes asset manager PIMCO, also of California, and Deutsche Bank, the sources said.

Blackstone could not immediately be reached to comment, while Deutsche Bank and the FROB declined to comment.

The sale of the portfolio is running alongside the sale of Catalunya Banc, which has received 12 billion euros in state aid since a government bailout in 2011.

Previous offers for Catalunya Banc have fallen short of the government’s expectations, prompting the decision to sell some of the bank’s assets separately. ($1 = 0.7370 Euros) (Additional reporting by Freya Berry in London; Writing by Tracy Rucinski; Editing by Julien Toyer and Jane Baird)

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