Monday 16 September 2019

Anglo 'won't hit target' in US loan-book sale


Laura Noonan

AS many as 25 investment groups, including some of the biggest names in finance, have reportedly lodged bids to buy parts of Anglo's $9.5bn (€6.6bn) US loan portfolio.

But US publications have suggested that Anglo may get as little as $7bn from the sale, significantly below the $7.5bn to $8bn the bank had been hoping for earlier in the year.

The news comes after Tuesday night's deadline for first-round bids on the portfolio of 248 commercial loans stretching from Manhattan to Boston to Florida.

The bids were lodged amid massive uncertainty in the US, as the country contemplated the economic impact of its first ever ratings agency downgrade.

As well as depressing prices, the crisis has put buyers' ability to fund their offers into sharp focus, and financing will be a key factor in determining who will go through to the second round.

Anglo has already ruled out taking any role in funding a bidder, a view the bank still holds despite recent market events, sources confirmed.

Bidders for the book are believed to include Deutsche Bank, Goldman Sachs, JP Morgan Chase, Wells Fargo, Lone Star Funds, TPG Capital and Blackstone Group.

Most bidders are acting in consortium and only bidding for a section of the loan book, meaning the most likely outcome is that the book will be sold off in tranches.

Anglo Irish Bank last night declined to comment on speculation that the book could fetch just $7bn.

The US loans had taken writedowns of €1.9bn by the end of last year. Local reports say that more than half of the loan book is non-performing.

The bank's official deadline is to sell the US assets by December 31, but management is working towards doing a deal by the end of the third quarter.

Earlier this week, Bank of Ireland struck a deal to sell its $1.4bn US commercial property portfolio to Wells Fargo.

Irish Independent

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