BARCLAYS has managed to offload $586m (£359m) of toxic assets to an American real estate investment trust (REIT), but investors are waiting to hear about the sale of Protium, the £7.5bn’s worth of toxic assets that Barclays converted into a loan in 2009.
The bank would not say what profit or loss it made on the $586m asset sale to CreXus Investment Corporation, which is dependent on the REIT successfully issuing between 50m and 57.5m new shares over the next month for around $700m.
The sale shows that many banks are finding it less difficult than anticipated to find buyers for “toxic” real estate assets bought in the run-up to the financial crisis.
But the key moment for investors will be if Barclays manages to find a buyer for Protium. It technically sold the assets in 2009, but it was forced to lend the money for the purchase itself and is keen to get the loan off its books. To that end, it wrote down £532m of the £7.5bn loan last year. Analysts expect a full economic sale in the next two quarters, possibly preceded by further writedowns.