Tuesday 25 October 2016

US investors in battle to land Nama's biggest ever loan portfolio

Published 26/08/2015 | 02:30

The Treasury Building on Grand Canal Street Lower where NAMA is based. Photo: Tom Burke
The Treasury Building on Grand Canal Street Lower where NAMA is based. Photo: Tom Burke

FOUR US investment firms have bid for the biggest loan portfolio Nama has brought to market so far.

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The distressed loan specialist Apollo Global Management, Cerberus Capital Management, and a consortium of Goldman Sachs and CarVal Investors have submitted bids for the portfolio known as Project Arrow.

Arrow is a colossal portfolio. It is made up of more than 1,500 loans tied to over 350 individual investors. The loans are secured against more than 2,400 properties. It has a par value of around €7.2bn.

The vast majority of the portfolio is tied to properties in Ireland, although they are relatively small in value individually. According to CoStar News, the largest loan is less than €10m and none of the properties is valued at more than €5m at this stage.

The final sale price, however, is likely to be at a deep discount to that price.

A bit more than a third of the loans are in receivership.

Just over €2.8bn, or 39pc, of the nominally-valued loans are secured by residential assets. Another 35pc of the loans are secured by a mixture of mainstream commercial properties, while just under a quarter of them are secured by land and development assets.

The remainder are tied to hotel and leisure assets.

A spokesman for Nama declined to comment. The deal is being managed by Cushman & Wakefield on behalf of the State bad bank.

This is the latest sale by Nama, pictured inset, which has accelerated its asset sales as it seeks to redeem at least 80pc of its so-called "Nama bonds" by the end of next year.

The bad bank is on track to put at least €250m worth of assets on the market every quarter this year and will comfortably exceed that target.

Project Arrow will also be the biggest single portfolio to have been sold by Nama, dwarfing the €4.5bn Project Eagle of Northern Irish loans it sold last year.

That portfolio was ultimately bought by Cerberus, but the sale has since been dogged by allegations around how it was carried out.

Eagle was eventually sold to Cerberus for around €1.5bn.

Since the sale, Independent TD Mick Wallace has made a series of allegations about the sale process, including that "a routine audit [of a law firm] showed that £7m (€9.8m) ended up in an Isle of Man bank account".

Mr Wallace told the Dail that that money was "reportedly earmarked" for a Northern Irish politician.

His accusations have thrown up a storm of controversy. Last week it emerged that a parliamentary inquiry into the sale of Nama's Northern loans portfolio will consider hearing from a witness who claims to have information about hours of secret recordings which could shed light on the controversial deal.

The Northern Ireland Assembly's committee on finance and personnel will consider whether it should take evidence from loyalist figure Jamie Bryson.

Mr Bryson wrote to the committee saying he could provide "documentation and evidence" in relation to the sale of the loan portfolio, codenamed Project Eagle, to US vulture fund Cerberus for €1.6bn last year.

Allegations of political kickbacks in connection with the deal are being investigated by the UK's National Crime Agency (NCA). Mr Bryson told the Irish Independent he had information in relation to more than 30 hours of phone calls into and out of a business premises in Belfast.

The business in question recorded calls as a matter of course, unbeknown to the people involved in the conversations, it is claimed.

Mr Bryson alleged the calls involved a prominent businessman and a number of senior politicians. He said the tapes were currently in the possession of a Belfast law firm.

Irish Independent

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