No you CAMt

27 September 2011 By Fiona Maharg-Bravo

The country’s bank rescue fund is preparing to offload a bust lender with the help of generous guarantees. But a deal would transfer any upside to buyers, while leaving the state on the hook for most future losses. With more bank nationalisations to come, Spain should hold on.

This content is for Subscribers only

Context News

Spain’s bank rescue fund is preparing a rapid sale of Banco CAM, a lender seized by the Bank of Spain on July 22.
Bidders were expected to make preliminary offers by Sept. 28, with a final sale expected in late October.
Spain’s Fund for Orderly Bank Restructuring (FROB) will offer bidders an asset protection scheme which guarantees up to 80 percent of the first 2.5 billion euros of losses related to certain real estate activities after provisions have been exhausted, according to several media reports.
Above that threshold, the FROB would absorb 90 percent of the losses over the next 10 years.
The FROB has already provided a 3 billion euro credit line to CAM and will inject 2.8 billion euros of capital to meet the government’s requirements.
The Bank of Spain said on Friday that the recapitalisation process undertaken by the country’s banks is nearly complete ahead of the deadline of Sept. 30.
Of the 12.7 billion euros that CAM loaned to real estate developers, 51 percent is in arrears. Including substandard loans, the figure rises to 61 percent.

Context News

Email a friend

Please complete the form below.

Required fields *