Haya Memo 040122
- Understand what Haya is worth, taking into account our bottom-up Spanish bank-, Sareb- and fund-level estimation of Haya’s declining addressable market of Spanish real estate non-performing assets (NPAs), declining servicing fee rates and EBITDA margin potential on new servicer contracts where the servicer does not pay cash upfront to its client
- Understand how we expect Haya to be restructured (jurisdiction, process and restructured package for Existing SSNs) and SSNs recoveries under our range of scenarios where we vary assumptions about: whether Haya renews upcoming servicing contract maturities; volume servicing and management fee rates at contract renewal; whether Haya is able to win new AUM as competitors’ servicing contracts come up for renewal; and the pace of resolution of Spain’s stock of real estate NPAs built up pre-2007 which defines the speed at which the Spanish real estate servicing sector’s addressable market is declining
- Understand financial performance, servicing fee reductions and servicing contract renegotiations experienced by Haya’s Spanish real estate servicing competitors: Altamira, Servihabitat, Aliseda, Solvia and Aktua
- Understand historic M&A transactions, and valuations thereof, in Spanish real estate servicer sector, which transactions we see as most relevant for valuing Haya and prospects for servicer consolidation
- Understand extent to which previous servicing contract model, whereby Haya and other servicers paid cash upfront to win servicing contracts, inflated EBITDA and EBITDA margins historically, and how servicers’ clients are now looking to squeeze servicing fee rates under new “no-upfront” servicing contracts
- Restructuring analysis of Haya – process, jurisdiction and SSNs recovery rates across base, bear #1, bear #2 and bull cases
- Financial projections & DCF valuation – base, bear #1, bear #2 and bull cases
- Bottom-up bank-, Sareb- and fund-level estimate of Spain’s remaining stock of real estate NPAs and of Haya’s addressable market and how this has declined more quickly than expected when Haya issued its SSNs
- Firm-level analysis of Haya’s Spanish real estate servicer competitors – Altamira, Servihabitat, Aliseda, Solvia and Aktua. How declining AUM and declining servicer fee rates at contract renewal are reducing firms’ revenue and EBITDA
- Unit economics analysis of Haya’s historic servicing contract models where it paid cash upfront to win contracts – cumulative net cash generation to date on “old-style” servicing contracts (including initial cash upfront) and projected remaining lifetime cash generation and IRR on cash upfront paid
- How big is Spain’s remaining stock of real estate NPAs?
- What does Sareb’s Esparta Project imply for reductions in servicer fees it may seek at the next renewal round in Jun-22? Is Haya in a better position to renew vs Sareb’s other servicers and could Haya win AUM at the next renewal round from its competitors?
- What servicing contract renegotiation have other Spanish servicers seen?
- How might Cerberus think about committing new money to Haya as part of an amend & extend / debt restructuring process?
- View, Variant Perception & Recommendations
- Business Overview & Analysis
- Structural Decline In Spain’s Stock Of Real Estate Non-Performing Assets
- Haya Key Client #1 – Sareb – Overview & Servicing Cost Reduction Strategy
- Spanish Real Estate Servicer Industry – Firm-By-Firm Analysis & M&A Transactions Valuations
- Historic Financial Analysis
- Scenario Comparisons & Probabilities – Base, Bear #1, Bear #2 & Bull Cases
- Base Case – Financial Projections & Valuation
- Bear Case #1 – Financial Projections & Valuation
- Bear Case #2 – Financial Projections & Valuation
- Bull Case #2 – Financial Projections & Valuation
- Restructuring Analysis – Base, Bear #1, Bear #2 & Bull Cases Under Spanish Concurso & US Ch. 15