Ireland could be stuck with chunks of Anglo loans following sale
IRELAND could be stuck with a ‘large portion’ of loans from the former Anglo Irish Bank even if private equity and sovereign wealth funds and/or banks buy up chunks of them.
The warning came from KPMG's Kieran Wallace, joint liquidator at the failed lender, as the Anglo loan book was opened up to potential buyers this week.
The first portfolio of loans, with a codename Project Evergreen, has a par value of €3.5bn, Mr Wallace told news agency Bloomberg in an interview today.
KPMG was hired by the government to wind up the bank which became part of IBRC when it was merged with Irish Nationwide.
Thirteen loans within the portfolio are being sold by KPMG – the total loan book for sale has a par value of €22bn.
Anglo’s collapse pushed Ireland towards bankruptcy in 2010 and Finance Minister Michael Noonan ordered the liquidation of Anglo in February.
What is not sold will be transferred to the National Asset Management Agency, under the plans.
A large portion will still more than likely go to NAMA, but we’re not disappointed by the level of external interest,” Mr Wallace said, adding the book has drawn 'very significant' interest. “Given the nature of this portfolio, it certainly will be one of the more attractive to external investors,” he added.
“Indicative bids for the Evergreen loans are due by October 11," said Shane McCarthy, who is helping run the sale process at KPMG.
Plans are already in place to sell other loans.
Mr Wallace said he expects 'a number' of borrowers will move to buy out their loans 'at par' to avoid them being sold to a third party.
NAMA will have to be reimbursed if the entire loan book is sold for, or independently valued, at less than €12.9bn – the amount NAMA paid the central bank this year to buy out the part of the regulator’s emergency loans to Anglo.
A spokesperson for the Department of Finance said today that the process is ongoing.
“The objective has always been that there would be no ‘fire sale’ off assets,” he said.