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Anglo fails to off-load 232 New York flats at auction

ANGLO Irish Bank failed to sell 232 flats in New York yesterday at a foreclosure auction.

The bank ended up buying the flats itself when it offered $82.75m (€61.2m) in a credit bid for the units at Manhattan's Battery Park City, a failed condo project that it began foreclosure proceedings on in February 2009.

No other bidders countered. Anglo had planned to auction the 232 unsold condo units to recoup $135m it is owed on the project.

The apartments at 225 Rector Place were due to be sold in bulk along with a garage and commercial space to maximise the return, said Chris Sullivan, a partner at New York-based law firm Herrick, Feinstein before the sale.

"You get a much higher price but you also get a sophisticated developer," Mr Sullivan said.

"The hope is you get a big developer who knows exactly what to do, who commits to finishing," he said.

The auction took place at New York Supreme Court in lower Manhattan. Anglo Irish Bank increased its US loans seven-fold in the four years through to 2008 to $9.3bn.

That was about 13pc of its total loans at the time, according to financial reports.

Anglo loaned to properties in at least 14 US cities, including Miami, Chicago and Detroit.

It backed at least $2.4bn of Manhattan real estate deals from 2005 to 2009.

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They included the renovation of the Apthorp, a 12-story property built in 1906 with 163 apartments and a 117-car parking garage; the purchase of a Ralph Lauren store on Madison Avenue and 72nd Street on the Upper East Side; and a Holiday Inn on Lafayette Street in Soho.

Back in Dublin, the bank said it would not pay December 1 distributions on its 6.949pc perpetual preferred securities, according to a statement issued through the ISEQ.

Anglo issued £350m ($556.7m) of the fixed- to floating-rate debt in May 2007, according to data compiled by Bloomberg. Holders of the securities are entitled to distributions on June 1 and December 1 until June 2017, after which they will begin to receive quarterly payments.

The news came as EU anti-trust commissioner Joaquin Almunia said he was still looking at the bank's restructuring plan, which was submitted to Brussels after another plan to turn Anglo into a business bank was rejected. "We have started the analysis of this restructuring plan and we are involved in discussions with Irish authorities," he said. (Bloomberg)

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