Friday 23 March 2018

Anglo seeks valuation of US assets

Laura Noonan

ANGLO Irish Bank has engaged consultants to carry out a loan-by-loan analysis of all its US assets in a bid to identify how much the $12bn (€8.6bn) portfolio would fetch today and which parts should be sold.

Sources yesterday confirmed that Anglo hopes to carry out a similar audit of its UK assets over the coming weeks, as the bank fleshes out plans to wind up its operations.

A detailed review of its remaining Irish assets is unlikely to be carried out for several months, given the level of "instability" in the Irish commercial property market.

US consultants Eastdil Secured and HFF are already four weeks into a review of Anglo's US loan book and are expected to complete their work in the next fortnight.

The experts have been asked to value each of the 640 properties in Anglo's US loan book, including prime shopping centres, apartment blocks and hotels.

Eastdil and HFF have also been asked to come up with "recommendations" on how Anglo can best proceed with individual assets.

"It's difficult to assess commercial property in a general way, so you really have to look at the particular circumstance for every asset," one source said.

"There could be a fully-performing asset in a city centre, and it might make sense to sell that now.

"There could be some other loans that should be restructured first, there might be some other cases where there are other vacancies in the area so it makes sense to hold tight."

Observers in the US are expecting Anglo to sell off the entire $12bn portfolio, as the bank pares back its operations in preparation for eventual closure. It is understood, however, that Anglo management believe they could lose as much as $4bn in value if they embark on a fire sale of the entire portfolio.

"A decision has not been made to sell the US portfolio," one source said, adding that the review was being carried out so Anglo could make a "considered decision" on the best approach to take.

While Anglo has to present plans to integrate its remaining operations with Irish Nationwide by the end of March, the broader international restructuring is working to a longer timeline.

A plan has been submitted to the European Commission and is awaiting approval, but Anglo is still working on the details of how best it can exit markets like the US and the UK.

The bank hopes to have a decision on its US approach at some point in April; the UK audit has not yet begun so a decision will be later.

Irish Independent

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