Business Irish

Wednesday 21 March 2018

Lloyds identifies four buyers for €2.2bn of property loans

Donal O'Donovan

Donal O'Donovan

Four bidders have been shortlisted as potential buyers of €2.2bn of "non-performing" Irish property loans being sold by Lloyds Banking Group.

The property loans were originally issued by Bank of Scotland (Ireland).

The short list of potential buyers is made up of a joint bid from US investor Kennedy Wilson with Deutsche Bank, and financial investors Och-Ziff and Varde Partners, a second joint bid from CarVal Investors and Centerbridge Partners, and two standalone offers from Lone Star and Apollo Global Management.

The line-up was revealed in a report by the specialist real estate website CoStar News.

Lloyds Group declined to comment yesterday.

The entire portfolio is made up of around 700 individual loans, mainly property loans with some hotel debt also included.

The bulk of the debt is secured on irish properties, with a smattering of UK assets with Irish owners also included.

The portfolio has been marketed under the name Project Pittlane, and with 50 borrowers involved makes for a private sector mini-Nama.


Bids have been invited for the entire loan book, or for parts of the portfolio.

The sale is being managed by Deloitte.

The "Pittlane" loans date back to the height of the property boom and are now classed as "non-performing" by the bank.

That means most of the debt has already been defaulted on, or suffered some form of impairment.

As a result the eventual buyer of the portfolio is really acquiring the properties secured on the debt, not seeking to recover the original face value and interest.

The collapse in the value of the properties secured on the debt means the eventual price recovered by Lloyds is expected to be a fraction of face value.

The debt is being sold by Lloyds because it took control of Halifax and Bank of Scotland in a rescue deal following the financial crisis.

It has since pulled out of the Irish market in terms of new business and aggressively written down the value of its remaining Irish assets, by some €14bn since 2007, according to research by Bloomberg.

It means the bank has already taken its losses up front, unlike many Irish banks, freeing it to accept lower offers for assets without necessarily booking any new loss.

Irish Independent

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