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Spain's version of NAMA takes assets

Tuesday, February 26 14:45:17

Four mid-sized Spanish lenders are poised to transfer soured property assets to a government-backed "bad bank", which today issued just over 14 billion euros of bonds to give to the banks as payment.

The bad bank, known as Sareb, is issuing senior bonds, which will be bought by the state, according to a filing with Spain's companies register.

The banks are expected to transfer deeply discounted assets for roughly that amount to Sareb, getting bonds in exchange which they can use as collateral to get funding from the European Central Bank.

Sareb was launched at the end of 2012 as a condition of a 40-billion-euro European rescue of the country's ailing lenders. It is designed to clean up Spain's banking system after a property crash five years ago.

Four of Spain's weakest banks, including Bankia, which took the biggest chunk of the European aid, already transferred 37 billion euros of assets to Sareb at the end of December.

Four more banks are now set to dump more assets in Sareb on Feb. 28, taking the bad bank's assets to between 50 and 55 billion euros.

Caja 3, which is in the process of being taken over by Ibercaja, said on Tuesday that it was transferring just over 2.2 billion euros of property assets to Sareb, while CEISS said it would transfer assets worth 3.1 billion euros.

Liberbank and BMN will also be parting with rotten real estate assets. (C ) Reuters