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Friday 22 August 2014

American investors stay in hunt for Lloyds' Irish book

Joe Brennan and Neil Callanan

Published 10/10/2012 | 05:00

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US investment firms Lone Star Funds and Kennedy-Wilson Holdings are among remaining bidders for parts of about €2bn ($2.6bn) of mainly Irish real estate loans which Lloyds Banking Group is selling, two people with knowledge of the matter said.

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The UK's second-biggest government-aided bank attracted bids of 10 to 15 cent in the euro for the so-called Pittlane portfolio, which is being sold in two pieces, according to two people, who asked not to be named, as the matter is private.

Initial bids were made in mid-September, with winners scheduled to be chosen next month, they said.

Lloyds decided two years ago to close and run down the Irish unit it acquired two years earlier as part of its 2008 takeover of HBOS.

The bank has taken £11.8bn ($18.9bn) of impairment charges on Irish loans since the nation's real-estate market collapsed four years ago, according to data compiled by Bloomberg News.

"The headline valuations on the portfolio highlight the still difficult outlook for property prices domestically," Eamonn Hughes, an analyst at Dublin-based Goodbody Stockbrokers, said in a note yesterday.

"Also, the valuation will reflect the desire of the vendor to exit Ireland."

Irish commercial real estate prices have plunged by two-thirds from their 2007 peak, according to Investment Property Databank Ltd, while residential property values have fallen by 50pc, according to the country's statistics office.

Spokesmen for Lloyds and Dallas-based Lone Star declined to comment. A Dublin-based spokesman for Beverly Hills, California- based Kennedy-Wilson wasn't immediately in a position to comment. (Bloomberg)

Irish Independent

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