The Norwegian opportunistic fund Axactor has acquired a portfolio of bad debts from Caja Rural del Sur. According to Expansión, the price at which they bought it is considerably lower than its nominal value.
These loans have a nominal value of €116 million, but only 39 million euros of the total have some kind of mortgage guarantee. The remaining €77 million are unsecured. The agreed price is around 5% of the nominal value on unsecured debt. Banks generally consider them irrecoverable, but this type of fund provides debtors with solutions to facilitate the liquidation of their debt. If they do not succeed, they go to court to claim the amount.
Financial institutions have €50.793 billion in bad debts in Spain. This figure, which is still quite high, has been on a downward trend since the 2008 crisis.
In the first half of 2020, transactions of this type fell by 20% in real estate markets in Ireland, Italy, Portugal and Spain. According to rating agency Moody’s, during the second half of the year, investment also fell by 10 per cent.