Sunday 26 February 2017

Anglo gets second-round bids for US loan book

FINANCE

Laura Noonan

Laura Noonan

ANGLO Irish Bank last night received second-round bids for its $9.5bn US loan portfolio, which is expected to fetch upwards of $7bn.

Some reports suggested that as few as five bidders had submitted bids. The bank declined to comment on the level of interest.

The opening round of offers attracted interest from as many as 25 investment groups, including some of the biggest names in global finance.

Many of the bidders were acting in consortium and most wanted to purchase only parts of Anglo's 248 commercial loans, stretching from Manhattan to Boston to Florida.

It is expected that Anglo may provide some update on the process on Friday, when it reports its first-half results.

Some €1.9bn (or about $2.7bn) of provisions had been taken on the US loans by the end of last year, implying that the nationalised bank would make a gain if the loans were to sell for anything over $6.8bn.

Sources with insight into the process said a sale would be positive for Anglo even at a lower price, since the costs associated with the US operation would be eliminated.

Any funds raised from the sale would also help the bank reduce its €45bn dependence on central bank funding, which includes some €28.1bn of "exceptional" support from the Central Bank of Ireland.

Despite the turbulent market conditions in the US, Anglo executives believe they will still get value from a sale now, although sources have stressed that a deal will not go ahead if offers aren't high enough.

Bank of Ireland has already secured a deal to sell its $1.4bn US commercial property loan portfolio to US banking giant Wells Fargo. The Department of Finance recently confirmed that AIB had less than €1.5m worth of US assets left to offload.

Irish Independent

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