Sunday 19 January 2020

Cerberus withdraws from home loan deals

Fianna Fáil TD John McGuinness. Photo: Stephen Collins/Collins Photos
Fianna Fáil TD John McGuinness. Photo: Stephen Collins/Collins Photos

Gretchen Friemann

Cerberus's appetite for soured Irish home loans has come under scrutiny after the US private equity giant withdrew recently from Permanent TSB's €2.2bn portfolio of non-performing residential mortgages.

The New York-based distressed debt specialist dominated Europe's bad debt market in the wake of the crash and accumulated billions of euro worth of assets in Ireland, including owner-occupier mortgages in arrears. However, its enthusiasm for this corner of the market is now in doubt as legislators ramp up measures designed to make home repossessions more difficult amid a wider push to curb the reach of the so-called vulture funds.

Sources said international investors are increasingly concerned at the raft of reforms circulating in the Dáil.

Last week, Fianna Fáil TD John McGuinness urged cross-party support for a fresh bill aimed at keeping hard-pressed borrowers in their homes. He told the Dáil we are "repeatedly informed by the banks the protection for the mortgage holder travels with the loan. That is simply not true."

The outcry against the funds spiked earlier this year after PTSB unveiled its Project Glas sale, which includes thousands of family home mortgages.

Cerberus has exited that race with Lone Star, Goldman Sachs and Oaktree thought to be still in contention. Cerberus acquired 900 owner-occupier mortgages from Ulster Bank in 2016. It is understood the firm entered the latest €1.6bn loan portfolio sale by the UK-owned bank, which includes €900m defaulting owner-occupier loans.

But some question whether Cerberus will quit Ulster bank's loan sale too and hold fire until the launch of Project Beech; AIB's reported follow-up sale to its truncated Project Redwood.

Irish Independent

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