Saturday 27 May 2017

Goldman plays dual role with Quinn Group

Bank buying group debt for clients while advising Government on Anglo proposals

Pedestrians pass the entrance to the new headquarters building of Goldman Sachs Group at 200 West Street in New York. Photo: Bloomberg News
Pedestrians pass the entrance to the new headquarters building of Goldman Sachs Group at 200 West Street in New York. Photo: Bloomberg News
Laura Noonan

Laura Noonan

INVESTMENT bank Goldman Sachs is snapping up discounted Quinn Group debt on behalf of clients while simultaneously advising the Government on Anglo Irish Bank's Quinn dealings.

The Irish Independent has learned that Goldman Sachs has been retained by the National Treasury Management Agency (Ntma) to run the rule over various plans submitted by Anglo.

This role includes examining Anglo's proposal to buy embattled Quinn Insurance to improve the bank's chances of recouping a €2.7bn debt owed by the wider Quinn Group and family, sources confirmed.

Separately, Goldman Sachs traders have also been actively buying up Quinn Group bonds on behalf of its clients.

It is understood that Goldman has taken a "small portion" of the €50m or so of Quinn debt that's been traded recently.

This €50m is less than 4pc of the €1.2bn in Quinn Group bonds outstanding.

The small level of debt that's been bought by Goldman means the bank's clients could not have a deciding say in the way the Quinn Group's debt is ultimately restructured.

However, the value of Goldman's clients' Quinn debt could rise or fall depending on the way Anglo's outstanding issues with Quinn are resolved.

A spokesman for Goldman last night said she couldn't comment on the identity of the bank's advisory clients, or on the specifics of any trading carried out on behalf of Goldman clients.

"All investment banks have Chinese walls in place to avoid and manage potential conflicts of interest [in general]," she added. "We are highly confident of the effectiveness of our Chinese walls."

A spokesman for the Ntma declined to comment.

It is understood, however, that the agency is aware of Goldman's limited dealings in Quinn Group debt.

The news comes as the Quinn Group's main lenders prepare to meet over the coming days to discuss the Cavan group's financial restructuring.

Senior lenders in the cohort include AIB, Barclays, Bank of Ireland and HSBC, who are all believed to be advised by Deloitte and Clifford Chance.

The Quinn Group has enlisted restructuring expert Murdoch McKillop of Talbot Hughes McKillop to advise it on the process.

Anglo believes its best chance of securing repayment from the Quinn Group and Quinn family is by taking over embattled Quinn Insurance, which has been under administration since April.

The bank last week lodged an expression of interest in the takeover, and is expected to submit a full offer in October.

Several insurance industry players have also submitted expressions of interest in Quinn Insurance, as have a number of private equity vehicles.

If Anglo does not take over Quinn Insurance, the wider Quinn Group has relatively little to gain from the sale, since it would only get a payment for the Quinn Health brokerage which is not in administration.

The level of the Quinn Health payout is likely to be less than €20m, according to insurance industry sources.

Irish Independent

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