# Rapid Asset Disposition Agency Annex Table 5: Process of Asset Dispositions

|**Country**<br>**Example**|**Process of Asset Sale/disposition: timeframe,**<sup>**procedure (including type of auctions,**</sup><br>**when applicable) and type of assets sold**|**Results of asset sale-Recovery per $ of assets**<br>**sold**|**Assets sold and assets**<br>**that remain on books of**<br>AMC**(as % of total)**|
|---|---|---|---|
|Spain<br>(77 -_85)_<br>Spain.Ac<br>Spain<br>(77-85)|Was transfer of assets a one-off process?<br>*<br>Generally, bank take-over was a one-off process. However,<sup>the Fund intervened twice in the</sup><br>Banco Industrial del Mediterraneo, in 1980 and 1982.<br>Process of asset sale:<br>*<br>Assets were sold through (i) divestiture of stock holdings<sup>of the Fund in firms or holding</sup><br>companies or liquidations; (ii) sale of real estate acquired;<sup>(iii) sale of portfolio of security</sup><br>holdings; (iv) sale of loans (no information on<sup>selling methods).</sup><br>cumulated<br>losses/profits:<br>Accumulated losses/profits:<br>*****<br>Purchase of assets continued through 1985 and<sup>the sale of most assets have been completed.</sup><br>According to the Deposit Guarantee Fund's 1986<sup>annual report (taken as year crisis subsided):</sup><br>-Losses related to clean-up of banks: Ptas 25.7 billion<br>-Accumulated losses: 90 billion pesetas.|Result of Asset Sale:<br>*****<br>_Sale of Banks._Of the 29 banks resolved through<br>the Fund and most were absorbed by domestic<br>and foreign banks.<br>*****<br>Mostly large domestic banks purchased or took<br>over the banks; the foreign banks that participated<br>in the resale included: Barclays, BNP, BCCI<br>Holdings, Citibank (in consortium), Chase<br>Manhattan.<br>*****<br>_Sale of Assets._With regards to the loans that<br>could not be sold to the new investors of the<br>banks, sale of mortgage loans and real estate<br>proved most successful. Most assets were sold<br>but a few still remain in the Fund's portfolio.<br>Purchaser of Assets: Both domestic and foreign|*****<br>The Fund has been able<br>to sell almost<br>everything. But, they<br>have still have a<br>minimal amount of<br>assets.|
|United States<br>(84- 91)|Was transfer of assets a one-off process?<sup>Not applicable.</sup><br>Timeframe: assets remained in conservatorship for 13<sup>months on average before liquidation</sup><br>Procedure & Type of Assets sold:<br>*<br>RTC asset disposition tools for assets that were not sold<sup>to acquiring bank thrift (in general about</sup><br>21 % of assets was passed on to acquirers,<sup>mostly securities and 1-4 family mortgages):</sup><br>-Securitization (accounted for 27% of assets sales):<sup>primary method for sale of all performing 14</sup><br>family mortgages. multi family and commercial<sup>mortgages; and consumer loans.</sup><br>-Bulk portfolio sales "structured transactions"(14% of asset<sup>sales): primarily used to dispose off</sup><br>non-performing commercial mortgages and problem<sup>real estate. Method used to achieve high</sup><br>velocity of sales since selling commercial assets<sup>one by one would have taken years. It took</sup><br>generally up to 9 months to package and close the<sup>sales of such large pools of assets (almost 70 %</sup><br>were in pools over $ 200 million each).<br>-"Equity participation" (11% of asset sales): designed<sup>to dispose off non-performing loans and</sup><br>certain real estate. The RTC, as a limited partner,<sup>contributed assets to the limited partnership</sup><br>while the private sector partner (general partner)<sup>was responsible for the management and</sup><br>disposition of assets. The cash flow derived<sup>from asset disposition was the divided (on a</sup><br>predetermined basis) between the RTC and the general<sup>partner.</sup>|Result of Asset Sale:<br>*****<br>Recovery rate:<br>-86 cents to the dollar (losses at disposition/total<br>assets taken over by the RTC).<br>-In general, wholesale asset sales (securitization,<br>bulk sales, equity partnerships and auctions) had<br>higher net recovery rates compared to retail<sup>sales</sup><br>**(nrivztp.rnntr,mtnrqhnernime**<br>**nffasterdiasno.itinn**<br>rate and shorter holding periods.<br>-The recovery rate ranged from 98% for<br>securities, 96% for 14 family mortgages,<sup>to 55%</sup><br>for real estate.<br>-Of 747 resolved thrifts, 497 were purchase<sup>and</sup><br>assumption (P&As), 158 were insured deposit<br>pay-offs, and 92 were uninsured deposit payoffs.|*****<br>RTC assets at book<br>value ($455 billion<br>remained on books) of<br>which:<br>-Assets sold: 33%<br>-Collections:3 1%<br>-Cash & Securities:10%<br>-Assets transferred to<br> <br>**nurchaser of thrifhs**11N<br>-Losses:13%<br>-Remaining assets<br>(transferred to FDIC)<br>2%.|