AIB sets up firm for restructured US loans
AIB has set up a special company to hold loans it advanced in the US that have since been restructured due to falling property prices.
AIB US Realty Inc is a wholly owned subsidiary of AIB. The amount of loans going into it is not known, but the company was formed to take shares in foreclosed property located in the US. Most of the deals arise from debt for equity swaps, but the bank declined to say how many of these it had done.
"It has been used for the purposes of restructuring a small number of US real estate loans,'' said a spokeswoman yesterday. The bank has not been trading in distressed loans, the spokeswoman added.
AIB has exposure to the US market through a variety of sources, including syndicated lending, loans to the not-for-profit sector and via loans to its private clients. It also owns a stake in M&T, the lender based in the north-eastern US, but its loans would not be going into such a vehicle.
AIB has a number of companies serving clients in the US. A company called Sanditon provides financial services to non-Irish resident companies or companies operating in the IFSC and to corporate clients in the US.
This company has also got involved in lending to UK companies.
AIB has been operating in the US since 1974 ,with offices in New York, Los Angeles and Philadelphia.
A large part of its business is lending to not-for-profits which operate in sectors as diverse as education, healthcare, culture and research. The bank also provides treasury services to a range of clients.
AIB was among a group of banks recently caught up in a foreclosure of a large development in New York called Stuyvesant Town/Peter Cooper Village.
The massive Manhattan apartment complex may be worth less than half what it was just three years ago. Bondholders have a $3bn mortgage on the property.
AIB is believed to have one of the smaller exposures of the lenders involved.