Wednesday, September 30, 2009

Caja Madrid Seeking EUR 70 Million Sale Leaseback of 58 Bank Branches in Spain

Expansión (as translated via Google) - September 29, 2009

Caja Madrid has released 58 branches to its network, an operation that provided input at least 70 million euros ($102.4 million) according to BusinessWeek reported yesterday. The Executive Committee of the box was informed of the operation in its meeting yesterday.

In line with what we already have other banks and savings banks Caja Madrid wants to perform, through its private bank Altae a sale & leaseback transaction, ie sale and subsequent lease of the properties. It will target a gain of 40 million.

The lease is for 25 years plus four renewals of five years, after which the lender has an option to repurchase. It also has a preferential option if the tenant wishes to dispose of the investment.

The investor will receive an annual return of 6% plus CPI. The offices up for sale are distributed throughout the national territory and 70% of them are located in provincial capitals.

With this operation, the second box Spanish intends to strengthen its capital and improve its balance sheet, as they have done entities such as Santander, BBVA, Caixa Galicia and Banco Pastor. The sale of the property resulting from their low balance, which reversed a decline in risk-weighted assets, or, put another way, less need for capital.

Many of the Spanish financial institutions have already made, or are considering such operations. BBVA has just closed his for 1.154 million last week.

Others like Sabadell, which also will eventually be raised to sell their entire branch network, given the situation in the housing market have opted to sell in small lots, they're putting mainly private banking clients. In fact, the very Caja Madrid will assess the market response to its offer to decide whether to sell more offices. Its branch network with 2183 totals as of June, of which about half is in Madrid.

Fight with the Electoral Commission
Aguirre and Gallardon returned yesterday to fight in the Electoral Commission when the first box, backed by a large majority, demanded that the president of this body, Fernando Serrano-del Ayuntamiento-is inhibited in the court case initiated by the consistory against implementation of the new law on regional boxes to the electoral process of the entity.

Most claim that Serrano may not represent the Commission, whichever is called to testify at trial. Serrano declined to vote on the issue, not being included in the agenda. The Aguirre had asked to convene another meeting tomorrow. In addition, Esperanza Aguirre, said yesterday that Rodrigo Rato TVE and Ignacio Gonzalez could preside Caja Madrid.

Sell and rent
1. Runs the operation through its private bank and hopes to join Altae 70 million, with gains of 40 million.

2. It stays as a tenant for 25 years renewable for another 20 and secured an option to buy.

3. Many Spanish banks and savings banks have launched similar operations to improve its balance sheet. Sphere: Related Content

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