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US investors win race for €1.2bn Ulster Bank property loan books


Ulster Bank

Ulster Bank

Ulster Bank

Three US investment firms and Bank of Ireland have won the race to buy loans from Ulster Bank with a par value of €1.2bn.

Lone Star Investors, Kennedy Wilson and Davidson Kempner will all take at least part of the portfolio known as Project Achill, while Cerberus Capital Management and Goldman Sachs may yet get a piece of the portfolio. Bank of Ireland has also taken over a portion of the loans.

The portfolio, which is being sold off by Ulster Bank and its parent Royal Bank of Scotland, covers loans tied to huge swathes of commercial property and some residential developments across Ireland and the UK.

Among the properties covered by the loans are Blackrock Business Park as well as 208 homes in Tyrrellstown outside Dublin.

Texas-based investment fund Lone Star is understood to have won the first tranche of the portfolio for €400m - a discount of €150m. That tranche includes shops on Edinburgh's prestigious Prince's Street and Exchange House in Belfast. A number of homes built by Bernard Caroll are also included.

Kennedy Wilson, meanwhile, is taking on tranche B, which includes loans tied to a number of retail parks around Dublin.

Davidson Kempner has won Tranche D. That tranche is secured against the Arc apartments in Belfast's Titanic Quarter among others.

Bank of Ireland has taken over tranche F, which is tied to Belfast developer Paddy McKillen. Tranches C and E are believed to be still up in the air, with LoneStar, Cerberus and Goldman Sachs all fighting it out.

Meanwhile, hotel operator Dalata has pulled out of its purchase of part of the companies behind the former Jurys and Berkeley Court Hotels in Dublin 4. The company agreed last month to take a quarter share in the Clyde Court Hotel and Ballsbridge Hotel for €21.8m.

However, that deal has fallen through after Ulster Bank and ACC decided to take over the share themselves.

Both lenders control the rest of the businesses and had the right to buy out the other shares if thy were offered for sale.

The move likely paves the way for the two hotels to be sold off in their entirety. Selling them as one lot will dramatically simplify any sales process.

Irish Independent