Canadian lender eyes up AIB's high-profile US loans
Published 18/04/2011 | 05:00
ONE of Canada's largest banks is believed to be interested in bidding for some of the US loans AIB has been ordered to sell off as part of the IMF/EU deleveraging plan.
Canadian Imperial Bank of Commerce (CIBC) has expressed interest in 45 commercial property loans AIB wrote at the peak of the boom in the US, it is understood. US lender Wells Fargo is also believed to be a bidder for the assets, according to media reports in the US.
The presence of two large north American lenders could push the price up for the assets, said sources in Dublin.
AIB has been asked to raise €13.3bn of fresh capital and concentrate mainly on the Irish market from now on. Like the other Irish banks, it has been told to get its loan-to-deposit ratios down to 122.5pc by 2013 -- forcing the bank to sell overseas assets during this period.
Ironically, CIBC was the Canadian bank reported to be interested in buying AIB in its entirety in August 2009 -- a suggestion that forced AIB to issue a stock exchange statement.
However, this tie-up with CIBC never materialised as AIB was sent reeling by further loan losses. Many of the 45 loans are portions of wider syndicated loans AIB took part in and buyers would expect to hold them until maturity, when the whole loan is paid off. Bank of America and Deutsche Bank are also believed to have looked at the loan portfolio.
AIB loaned on many high-profile projects at the tail-end of the boom, including loans for the KPMG Tower in Los Angeles and the Sofitel Hotel in midtown Manhattan.
An interest in the Irish banks by Canadian investors has been long mooted but nothing has happened to date, although Canadian investors were substantial buyers of Irish bank debt over recent years. In 2009 AIB said there had been interest from a "third party'' in a minority stake in the bank, but nothing was expected to happen in the "near term''.
"There can be no certainty that these discussions will lead to a proposal to invest in the group or a transaction being concluded,'' the bank said.