Spain has left major questions unanswered in its rush to set up a "bad bank" to manage toxic loans built up by the country's lenders, creating a detail vacuum that is keeping potential investors at arm's length.
It will open SAREB, which will ultimately house around 60 billion euros ($78 billion) of rotten real estate loans, properties and deserted tracts of development land built up by Spain's ailing lenders, by the end of the year, but many of the details on how the assets will be managed and sold are still being hammered out.
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The good news for its architects is that it has raised the 2 billion euros in private capital it needed by the end of December, a source with knowledge of the process said.
However, the hunt for external investors has been fraught, and the target was only met after Madrid leant on Spain's biggest financial institutions to make big contributions.
Banks Sabadell and Santander and domestic insurers Mapfre and Mutua Madrilena have now said they will participate, while international groups with a presence in Spain, such as European insurer AXA , are also looking at investing.
A person familiar with the matter said Britain's Barclays would also invest.
But other top Spanish players such as BBVA are resisting, and some of the foreign investors Spain was hoping to attract, such as private equity firms or sovereign wealth funds, are unlikely to look at participating until February or March, bankers familiar with the talks said.
Most want more clarity on the assets to be transferred into SAREB, their value and how sales of the loans will eventually be financed, the bankers said. Even as the first transfer of assets looms, many of these elements have yet to take shape.
Under the scheme, which is based on Ireland's experience in restructuring its banks, solvent lenders move bad loans and repossessed property into the new entity at a discount to their face value and receive state-backed bonds in return.
"There are huge logistics involved. You need lawyers, infrastructure, technological servicing. That is not set up," said a banker advising potential international investors in SAREB.
"Our feeling is it's complete chaos."
Four nationalized lenders - Bankia , Catalunya Banc, NCG Banco and Banco de Valencia - will dump 45 billion euros of discounted assets into SAREB by year-end.
The lenders will also receive 37 billion euros in European aid to plug the capital holes created when a property bubble burst almost five years ago.
Spain needs to keep its share of the 3.9 billion euros in start-up equity for SAREB to below 50 percent to reduce the burden on public finance. Eventually, SAREB will have 5 billion euros in equity, with at least 2.6 billion euros to come from private investors.
Most of that will be in the form of subordinated debt, with investors also potentially able to put in assets rather than cash to make up the capital, but such debt carries a risk of being wiped out but no upside in the event of a rosier outcome.
The haste to set up SAREB, to meet the conditions of Spain's banking bailout set by Europe, is in part what has put investors off taking equity in the enterprise.
In other instances of bad banks, such as Ireland's, loans were valued individually before transfer, but in Spain's case, it is assigning value to portfolios of loans because of the sheer volume and range of assets involved.
"It's a proposition that makes little sense; you would be investing blindly," said Manuel Anguita from Aguila, which brokers deals between banks selling assets and investors.
The rush also led to confusion over the valuations. Some top Spanish bankers and advisers involved in the bailout were caught off-guard by a gap between how Spain planned to value those assets and the valuations the European Commission said it would use last week, which imply steeper discounts, said two sources involved in the bad bank negotiations.
"It was a bit of a surprise," said one. "Had we known sooner, we might have used different transfer prices."
Once it is up and running, there are also questions over how soon SAREB will be able to start selling assets, with some bankers predicting that might take until the end of 2013.
SAREB may initially have to rely on existing teams at Bankia and the other banks involved to keep managing their portion of toxic assets, two sources familiar with the process said, adding servicing agreements were being worked on.
At a later stage, parcels of loans could be analyzed in more depth as they are prepared for sale, a third person said. Even then, there are worries that undeveloped land, some of it now worthless, or incomplete developments that will have to be torn down, will be hard to sell.
To buy foreclosed properties, investors often seek loans, plus guarantees that eventual buyers of the homes will get mortgages, which they can sometimes get from the selling bank.
Negotiations over how Spain's healthier lenders might be able to finance these acquisitions are underway, one of the sources close to the process said, while another said there were plans to find a way for SAREB itself to be able to develop unfinished properties or land.
Other issues related to information disclosure procedures and insufficient tax breaks have also put off international investors, the sources say.
Next year, the company set up to house SAREB will formally become a fund, and tweaks to its structure could resolve some of these questions, while new tax rules will take effect.
Even so, the field of potential equity investors is small.
SAREB is targeting a 14 to 15 percent annual return on equity over its 15-year lifespan, but with doubts about how soon it will be able to get close to that, funds needing to make short-term returns might give it a wide berth.
"There has been a lot of interest from international investors. But it's hard to know how much of that is real," said one of the bankers.
($1 = 0.7700 euros)
(Additional reporting by Jesus Aguado, Carlos Ruano and Julien Toyer in Madrid and Laura Noonan in London; Editing by Julien Toyer and Will Waterman)