Monday 18 December 2017

Over 30 bids received for former Anglo loans

The dismantling of the former Anglo Irish Bank - David McWilliams says the Irish central bank used
The dismantling of the former Anglo Irish Bank - David McWilliams says the Irish central bank used "magic" to invent money for the shell Anglo in order to pay back its creditors

Peter Flanagan Commercial Property Editor

MORE than 30 bids have been submitted for two commercial property loan portfolios from the former Anglo Irish Bank, as demand for the loan books hots up.

A slew of international bidders, including some of the top US funds who specialise in buying so-called distressed debt are believed to have made first round bids for the loan books, known as Project Rock and Project Salt.

Project Rock is worth about €7.8bn in total, but a little over €2bn worth of those loans – mostly UK commercial real estate – are up to date and are expected to be refinanced by the borrower. That leaves more than €5.5bn worth of loans that are in arrears.

Project Salt, meanwhile, is made up mostly of Irish commercial property loans, with close to €2bn worth of lending that is now in arrears.

IBRC's special liquidators – KPMG's Kieran Wallace and Eamonn Richardson – are believed to have sought bids for the entire portfolios, a single tranche, or any combination of multiple tranches.

That means that there is huge scope for how the loans will ultimately be dealt with.

Projects Rock and Salt are considered by far the most attractive loan portfolios to international investors and have always been expected to attract widespread interest.

Rock is made up of largely UK commercial real estate which has been recovering at a much better clip than equivalent properties in Ireland.

Salt meanwhile is made up mostly of loans that were given out in the UK within two subsidiaries which are not part of the IBRC liquidation proceedings, IBRC Property Lending Limited (IPL) and IBRC Asset Finance (IAF).

Crucially, Salt is not subject to restrictions on what kind of discount the special liquidators can sell at.

The loans were valued by KPMG when the liquidation process began, and Finance Minister Michael Noonan has barred the Project Rock and three other portfolios from being sold at a discount to the valuation.

That has sparked concern that the market for IBRC's loan books may be tighter than had been expected, with potential investors warning about the "rigid" nature of the sale process.

The special liquidators, however, have repeatedly said they were "not unhappy" with the scale of interest they had seen in the IBRC portfolio.

Projects Rock and Salt are part of a wider sale of the former Anglo and Irish Nationwide Building Society's remaining loans.

Project Evergreen, Project Sand, and Project Stone are all on the block as well as part of a sale of loans with a par value of more than €22bn.

The number of bidders was first reported by CoStar Finance.

Sunday Independent

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