Wells Fargo purchases €1.09bn of Anglo loans

SAN FRANCISCO-based bank Wells Fargo has said that it has completed the purchase of just under half of the commercial loans it is buying from the former Anglo Irish Bank.

The bank is buying $3.3bn (€2.4bn) of the US loan book of Anglo (now the Irish Bank Resolution Corporation/IBRC). It said that about 25 of the 61 loans, worth $1.5bn, (€1.09bn) have been purchased as of this week, with the remainder set to be formally taken over before the end of the year.

According to a spokesperson for the IBRC (the holding body of the two wind-down banks of Anglo and the Irish Nationwide Building Society), the company is not set to comment, any further, on the sale process until all of the $9.2bn loan book is sold. It is expected that the entirety of loans will be sold in the coming three weeks.

It is understood that, as well as Wells Fargo, JP Morgan and the Texas-based fund manager, Loan Star, make up the buyers.

Last week, IBRC received around €2bn for the first tranche of loans, but declined to name the buyer. It said then that the initial funds would allow it to repay the $1bn senior unguaranteed bond which matured on Wednesday and reduce its total net borrowings, including funds drawn down from the Central Bank’s emergency lending facility.

Speaking last week, IBRC chief executive Mike Aynsley said the completion of the initial US loan transfer marks “a significant milestone, not only for IBRC, but also in the progress being achieved by the state in deleveraging and stabilising the Irish banking sector.”

Wells Fargo, which last week reported that its third quarter earnings had missed expectations, has bought about $600m in US commercial property loans from AIB and $1.4bn from Bank of Ireland this year.