Lone Star Funds and JPMorgan are reportedly in pole position to acquire a portfolio of Spanish property loans for up to €3.9 billion.
German lender Commerzbank is offloading the loan portfolio at a discount, Reuters reported, with the final purchase price likely to be between €3.7 billion and €3.9 billion. Spanish daily Expansion suggested a sale price of €3.5 billion was more likely. Lazard is managing the sale process.
Under the terms of the deal, Lone Star would acquire the majority of the portfolio with JPM acquiring the rest and also providing debt financing to back the acquisition, reports said.
If successful, the deal would be the latest loan portfolio acquisition by Lone Star, which has become one of the dominant players in the market. Earlier this year, it won the auction for a large part of a £6.3 billion portfolio of UK loans sold by Anglo Irish Bank. Last year, it teamed with Wells Fargo to acquire a £4 billion portfolio of UK real estate loans, with Commerzbank again the seller.
About €1 billion of the Commerzbank portfolio is non-performing debt, while performing loans secured against commercial real estate account for the remaining €3.3 billion to €3.5 billion in the portfolio.
A 25-strong team from Commerzbank is understood to be moving to Lone Star to help the Dallas-headquartered investment group manage the loan portfolio, Reuters said.
Commerzbank and JPM declined to comment, while Lone Star could not be reached for comment by press time.
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