Monday 23 October 2017

Cerberus bites off more Ptsb loans

Permanent TSB. Photo: Collins
Permanent TSB. Photo: Collins

Mariana Ionova and Donal O'Donovan

THE State-backed Permanent TSB is close to a deal to sell the last of its UK Capital Home Loans mortgage portfolio to Cerberus Capital Management, according to three people with knowledge of the situation.

The US private equity group, best known for its controversial acquisition of Nama's massive Northern Ireland loan portfolio, is understood to have been selected as a preferred bidder for the UK portfolio, the people said.

The mostly buy-to-let mortgage book totals about £2.5bn.

While the sale is not yet finalised, Cerberus is understood to have emerged as a frontrunner for the portfolio, which Ptsb is trying to sell as part of a wider deleveraging effort.

In March 2015, Cerberus bought the other half of the CHL's assets, which also totalled £2.5bn. The group also bought the legal CHL entity as part of the transaction - potentially setting it up with a platform for new lending.

Last year's sale by Ptsb provided a particularly strong boost to the bank because the sale price was flattered by the then weakness of the euro compared to sterling.

In euro terms the valuation of the 2015 sale had been boosted by a massive €300m in a matter of just months by the sharp fall in the value of the euro against sterling, according to the same presentation.

This time around, the currency markets have gone against the bank.

Ptsb originally aimed to sell the rest of the book by the middle of this year to meet the terms of a deleveraging programme agreed with the European Commission.

That timetable slipped because of uncertainty over the impact of the UK's Brexit referendum, but now looks to be back on course.

Ptsb declined to comment. Cerberus did not immediately respond to a request for comment.

Last year, Cerberus also purchased £13bn in Northern Rock mortgages from the UK government, securitising the bulk of them earlier this year.

The group is also in the process of securitising a part of the CHL mortgages it purchased last year. (Additional reporting Reuters IFR)

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