Sunday 22 September 2019

PTSB sells distressed mortgages for €264m

Protections: Jeremy Masding
Protections: Jeremy Masding
Donal O'Donovan

Donal O'Donovan

State-owned Permanent TSB has agreed to sell mortgages owned by almost 2,000 borrowers to US fund Lone Star in the latest in a slew of so-called distressed loans sales.

The loans were sold for €264m, a fraction of the €506m face value of the debts owed to the bank. The portfolio was valued at €274m ahead of the sale. Lone Star owns Start Mortgages and is already one of the biggest owners of Irish defaulted mortgages.

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Start Mortgages will take over servicing of the debt from Permanent TSB when the transaction completes. The portfolio consists of 1,932 borrower relationships comprising 1,422 private dwelling homes mortgages and 510 buy- to-lets.

Permanent TSB's ratio of bad loans will now fall from 10pc to around 7pc, approaching a target set by European regulators which has driven a dramatic surge in mortgage sales across Irish banks over the past year.

All of the loans being sold are categorised as non-performing, meaning they have been in deep arrears. Permanent TSB said it is writing to all customers affected.

The bank's CEO, Jeremy Masding, said the sale will not mean customers lose existing protections.

"It is important to note all customers will continue to be afforded existing regulatory protections after the transfer and that Start Mortgages is required to honour the terms and conditions of the Restructure Agreements or Alternative Repayment Arrangements in place for customers included in this sale".

Analysts at Davy said the sale was a positive step from the bank and earlier than expected. The bank was advised by EY and Mason, Hayes & Curran.

Shares closed down almost 5pc at €1.10 each.

Irish Independent

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