AIB Project Pivot offload bid revived

AIB’s attempt to offload a portfolio of British-based property loans valued at €245m has been revived after an earlier deal collapsed at the start of the week.

It was reported by CoStar News that after restructuring the loan portfolio by rem-oving about 40 loans, the portfolio known as Project Pivot is now being looked at by four interested parties: Cerberus Capital Management; a joint bid by Kennedy Wilson and Deutsche Bank; Telereal Trillium; and a fourth hedge fund bidder.

The four bidders were selected at the end of July, in a sales process managed by Citigroup.

The slimmed-down project pivot is now valued at €245m, made up of 60 individual loans.

Originally, Project Pivot was valued at €470m and made up of more than 100 loans.

It is understood that AIB is going to manage the loans removed from Project Pivot internally, while it aims to close the slimmed-down Project Pivot deal before the end of the year.

The reason that the deal almost fell apart relates to the portion of the loans that were to corporate clients.

Corporate loans require greater work to seize control of the underlying properties, as well as incurring the expense in having to hire accountants to ascertain how control over assets can be established.

This extra work and layer of uncertainty prompted bidders to price steeper discounts over the corporate loans, compounding the discount problem for AIB and, ultimately, made the Project Pivot economically unviable in its original €470m form.

The near-collapse of the Pivot sale comes just three weeks after AIB sold the circa €650m Project Kildare Irish NPL to Lone Star at a near 60% discount.

AIB selected Lone Star ahead of finalists Kennedy Wilson, in a joint bid with Varde Partners, and Goldman Sachs’ Special Situations Fund, for the majority Irish commercial property loan portfolio.

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