Sacramento Refinance

That the American crisis of the mortgages of high risk (“prevails”) has not affected the Spanish organizations, at least until the moment, is a reality stated even by the Bank of Spain. But it is not possible either to be denied, although they are the minuses, that in our country also exist mortgages prevails. Possibly with a measurement of the risks greater than in the United States, where the past year 29% of the mortgages were of this type.

Almost all the Spanish organizations deny to have mortgages “mainly prevails”, mainly because many commercialize these loans through “white” marks of the own company or one arisen by means of the grouping from several organizations, savings banks. But reality is that they prefer to grant these credits of high risk to try to solve one serious economic situation of a client by means of refinancing of debts, that can be conjunctural, instead of to have Santander Central Hispano, the most transparent unique bank that has been publicly recognizing that there is “prevails” in Spain is Santander, through its vice-president and delegated advisor, Alfredo Sáenz, in the presentation of results realised for days. Sáenz declared abiertamente that “clear that there is “prevails” in Spain, is a question of pure common sense”. It is more, added that “the criteria by which a mortgage is considered “prevail” in the Anglo-Saxon countries can be applied to Spain perfectly”.

The business of mortgages “prevails” of the bank that Emilio presides over Booty is realised through his financier Santander Consumer Finance, to refinance debts or always to reunify debts of weak clients.

The volume of credit that is granted to these clients goes from a 45% of the value of appraisal of its house to a maximum of 75%, always based on the delayed payments whom it has and of the maximum ratio of indebtedness that it has with respect to his wage, established between a 40% and a 60% of its pay.

That is to say, the mortgage “prevails” of Santander Consumer Finance could at the most be of 45% of the value of the house if its monthly payment monopolizes 60% of the pay of the client. The case more extreme than contemplates of concession of this type of credit to refinance debts is for a client with four operations of non-payments, at which it is possible to be gotten to give a maximum equivalent to him of 50% of the value of appraisal of his house and if its ratio of indebtedness is also of 50% of its wage. That client will have to do against an interest of 12% the first year, and soon annual revisions of the Euribor more 4.75 points. In its annual memory corresponding to exercise 2006, Santander explains that this he is one of the new businesses developed in that exercise in Spain, and adds very that “its impulse has contributed to elevate the growth of the new production of the direct credit until a 36%, over registered 20% in average in the area”. Which demonstrates that a business with risk, if well it is also managed is a good business.

Celeris Financial Services is participated by 20 savings banks of all Spain, and besides realising personal loans, one of its businesses is to regroup debts of clients of these boxes that have had some type of dilatoriness incidence.

The bank is prepared not whatever the cost to renegotiate the conditions from the 4,850 million debt that asphyxiate the balance of the group Haste, but. The main deserving banks of the company, between which are HSBC and BNP Paribas, like international organizations, and the Caixa, Banesto and Caja Madrid, between the nationals, have demanded to Haste more guarantees to extend the terms of return of the debt.

According to expert sources of the negotiations, the banks have demanded to Haste that reinforces its capital, like inescapable previous condition for, first, proroguing the credit bridge of 1,950 million Euros, that overcomes the next March, and also to refinance the rest of the debt of the group. Haste already has prorogued the amortization of this credit, that it had determined the term initial of victory the 21 of 2008 July. In this sense, Spanish banks and BNP would already have been inclined to accept refinancing with these conditions.

More guarantees
In addition, according to it consists in the information that accompanied the call by its last meeting of shareholders, Haste has guaranteed with his branchs the Country, Santillana, Union Radio and Capital Average the syndicated credit of 1,950 million Euros, that served to him to finance the takeover on the 100% of its Sogecable branch.

The recapitalización quickly can suppose the entrance in its shareholders of “excellent partners, without the reference partners lose the majority control” of the communications group, according to confirmed October the advisor delegated quickly the past, Juan Luis Cebrian, as he had advanced EXPANSION the past 26 of September.

The operation can dilute the participation of the Polanco family and his partner, Francisco Perez, from 70% that he controls at present, “to 58% or 55%, at the most”, according to declared then Cebrián. In order to achieve this objective, Haste obtained in its last meeting, held the past 5 of December, the authorization of its shareholders to use “anyone of the financial instruments of the market” to catch up to 2,000 million Euros, that can include convertible bonds, warrants and entered of subordinated capital.

The plans of Cebrián happened to have ready the plan of refinancing before 2008 finished, with the aim of reducing the indebtedness, from present the 6.5 times the gross result of operation (ebitda) of the group to three times ebitda. So far, it has not been able, nevertheless, to close an agreement, as they demand his creditors.

Search
Paralelamente to the possible emission of debt, complicated by the situation of the financial markets, the company quickly looks for a partner who injects resources, in the capital or branchs like Santillana, Union Radio and the Country, like capitalization alternative.

Practically discarded a possible exchange of debt by action, before the little disposition of the banks to enter the capital of the group, Haste looks for it go to its partners. People in charge of the company have maintained contacts with risk capital bottoms, between which are KKR, Texas Pacific Group and Blackstone, without it reached no agreement. In addition, according to some sources, the conversations have extended the Mexican tycoon Carlos Slim, proprietor of the giant of the Telmex telecommunications, that recently has injected 250 million dollars in the publishing company of The New York Times.

Haste, that has suspended to east year the payment of the dividend, since it for the first time began to quote, in the year 2000, also maintains the negotiations open to sell its platform of payment, Digitalis +, to Vivendi and Telefónica. So far, important differences of valuation prevent the agreement.

That the American crisis of the mortgages of high risk (“prevails”) has not affected the organizations Spanish, at least until the moment, is a reality stated even by the Bank of Spain. But it is not possible either to be denied, although they are the minuses, that in our country also exist mortgages “prevails”. Possibly with a measurement of the risks greater than in the United States, where the past year 29% of the mortgages were of this type.

Almost all the Spanish organizations deny to have mortgages “mainly prevails”, mainly because many commercialize these loans through “white” marks of the own company or one arisen by means of the grouping from several organizations, savings banks. But reality is that they prefer to grant these credits of high risk to try to solve one serious economic situation of a client, who can be conjunctural, instead of to have to put in a contentious little profitable length and.

The Santander, most transparent

The unique bank that has been publicly recognizing that there is “prevails” in Spain is Santander, through its vice-president and delegated advisor, Alfredo Sáenz, in the presentation of results realised for days. Sáenz declared abiertamente that “clear that there is “prevails” in Spain, is a question of pure common sense”. It is more, added that “the criteria by which a mortgage is considered “prevail” in the Anglo-Saxon countries can be applied to Spain perfectly”.

The business of mortgages “prevails” of the bank that Emilio presides over Booty is realised through his financier Santander Consumer Finance, to refinance or always to reunify the debt of weak clients. The volume of credit that is granted to these clients goes from a 45% of the value of appraisal of its house to a maximum of 75%, always based on the delayed payments whom it has and of the maximum ratio of indebtedness that it has with respect to his wage, established between a 40% and a 60% of its pay.

That is to say, the mortgage “prevails” of Santander Consumer Finance could at the most be of 45% of the value of the house if its monthly payment monopolizes 60% of the pay of the client. The case more extreme than contemplates of concession of this type of credit is for a client with four operations of non-payments, at which it is possible to be gotten to give a maximum equivalent to him of 50% of the value of appraisal of his house and if its ratio of indebtedness is also of 50% of its wage. That client will have to do against an interest of 12% the first year, and soon annual revisions of the Euribor more 4.75 points. In its annual memory corresponding to exercise 2006, Santander explains that this he is one of the new businesses developed in that exercise in Spain, and adds very that “its impulse has contributed to elevate the growth of the new production of the direct credit until a 36%, over registered 20% in average in the area”. Which demonstrates that a business with risk, if well it is also managed is a good business.

Celeris Financial Services is participated by 20 savings banks of all Spain, and besides realising personal loans, one of its businesses is to regroup the debt of clients of these boxes that have had some type of dilatoriness incidence.

To regroup the loans

To these clients it is commited to them to cancel all loans and to regroup them in which it can at the most reach 70% of the value of appraisal of his house with two or three pending quotas or delays and following the ratio of indebtedness with respect to the wage. When the client or is immersed in a judicial process the maximum that grants to him is a mortgage of the 50 or of 55% of the value of appraisal of its house and with an interest of the Euribor the more 6 points. Also, several small farm loan banks are in process to group themselves to remove their own mark for this type from businesses.

Caixa Galicia has its own mark to refinance debt: CXG Familiar Credit. Under this company/signature, besides granting all type of loans it realises debt regrouping, that if she is clean, that is to say, without no type of dilatoriness, can reach to 80% of the value of appraisal of the house of the client. When some type of incidence is observed that appraisal remains in 65% of the value of the house and the interest that is received is the Euribor more 2.5 points; if there is some judicial process by means stoops to 50%, and the type of interest rises to the Euribor more 3.5 points, whereas if there is executive procedure the applied type is Euribor more 4.5 points.

The German bank Deutsche Bank, that has recognized to be affected by the hypothecating crisis of the United States and whose result has descended a in the last quarterly 19%, also has mortgages of high risk in Spain through company/signature DB Credit. Its more significant product is a mortgage whose volume reaches the 120% of the value of appraisal of the house, but the quota cannot exceed 40% of the income of the client asks for who it. Also it admits refinancing of debt clean, equivalent to the 100% of the value of the house, when the majority of the organizations does not grant more of a 80%. The ratio of indebtedness can arrive until 65% of the pay of the client when this one has not had any type of incidences of weak type and has an indefinite contract.

Clients in file of weak people

General Electric is also classic in our country with respect to refinancing or regrouping of debts. Its more common mortgage is the one of until a 80% of the value of the house with a rate of indebtedness of 35% with respect to the wage.

The peculiar thing, is that it admits clients who are registered in the file of weak people of the National Association of Financial Organizations (Asnef) with a number of up to 10,000 Euros, although the amount most common in the clients with whom it works oscillates between the 3,000 and 4,000 Euros. Any other organization does not work with these clients.

In order to reunify debt of clients under judicial procedures, the maximum credit that grants is of 65% of the value of the house and with a ratio of indebtedness of 50%, and the interest arrives until the Euribor more 8.35 points.

In spite of everything, Spain continues being a paradise for the banks and boxes as far as dilatoriness, because they are in historical minimum rates and because the average degree of cover of the bank is of 250% with respect to the credits of doubtful collection.

However, the volume of doubtful credit rose in August to 13,826 million, which supposes an increase of 34.5% on equal month of 2006. The rate of dudosidad has that happened 0.741% that was a year ago to 0.826% of now, informs Servimedia.

Often to refinance a debt is an alternative before falling in cessation of payments and to enter files or listings of weak people, this seems to be the business of the financial organizations at time of crisis, when the consumption is dissuaded and the income fall to confront debts.

What is a refinancing? We can denominate it as reconstruction of a debt in voluntary form by the holder of the same or negotiation between indebted and the deserving organization. The idea is to decide a monthly but small payment avoiding to fail to fulfill with the quotas of the loan to a short or medium term, or so that it wants to have but I oxygenate financier if it takes to exist some on jump in the economy. Those of involuntary character usually they are debt that the financial organizations prefer to recover reaching an agreement with the indebted one, instead of to thicken the list of uncollectable money.

In order to exist a refinancing a debt must exist, generally the same to have to be cancelled in a percentage that goes from the 10 to the 20% of the total of the capital if maximum amortization is had taken the term, exists alternative if the debt is were not cancelled in which it puts as floor the financial organization but the term of amortization is not the maximum, to extend this I complete to an agreed term but to the possibility of payment of the indebted one.

If refinancing is hypothecating, implies to sign a new mortgage, generally called second mortgage. To refinance a hypothecating debt allows to pay low interests but that if the debt is of a personal loan, but will be due to consider all the expenses that this implies (public notary public, expenses of cancellation of the first mortgage, expenses of constitution of the second mortgage, expenses of registry, possible taxes that generates the operation, etc.)

Although as we saw more above an alternative exists to extend the term of amortization for example of 15 to 20 years.

He is recommendable before realising a refinancing to consult by all the expenses that incur to realise this type of step, as far as possible to ask for it in writing, besides making comparisons with different organizations.

The airport manager British BAA, Railroad Spanish cluster property that presides over Rafael of the Pine, has completed the operation by which he equips with a long term permanent financial structure his British airports and that the refinancing of its debt supposes, whose amount is of 16,866 million Euros, informed yesterday the company to the National Commission into the Market of Valores (CNMV).

This amount includes 4,186 million for investments it jeopardize in the seven airports that the operator manages in the United Kingdom.

One is the financing of these characteristics of greater volume never completed, and “it assures that BAA has the suitable financial structure to implement their ambitious program of investments to increase the airport capacity, to construct new facilities and to provide a better service to passengers and airlines”, according to honored in an official notice Colin Matthews, executive director of BAA. In particular, the operation of financing had like elements keys a corporative rearrangement to separate the financing of the airports regulated and of not regulated; as well as the financing for both cases.

Step by step

The financing of the airports regulated of Heathrow, Gatwick and Stansted represents the agreement most of, with commitments of debt by 15,347 million Euros. The past 5 of August, BAA took an important step to close this refinancing when obtaining the support of the assemblies of bondholders to migrate “all the series of existing bonds” of the company to the new structure of financing.