IBRC delays loan valuations, sale

The valuation and sale of IBRC loans has been pushed out by six months to November and December of this year.

When IBRC was liquidated in February, the original timetable was to have the valuation of the €16bn IBRC loanbook completed by the end of May and the sales process completed by the end of August. Any remaining loans are to be transferred to Nama.

However, the IBRC’s special liquidator, KPMG, issued a statement yesterday saying that the valuation process will be completed by 11.59pm on Nov 30 and the sales process completed by 11.59pm on Dec 31.

The Irish Examiner report two weeks ago that there had been delays in the valuation process, particularly agreeing a valuation methodology for the cashflow loans.

Commenting on the publication of the further Ministerial Instructions, a spokesperson for the special liquidators said: “The objective of the special liquidation of IBRC is to maximise the proceeds that can be realised from the sale of IBRC’s assets in accordance with the IBRC Act 2013 and the ministerial instructions received under the act. This process requires the special liquidators to arrange for the independent valuation of IBRC’s loan assets and to conduct an open and transparent sales process wherein assets will be sold where offers are received that are equal to or in excess of the asset’s valuation price.

“Consistent with the objective of maximising the proceeds realised from the sale of loan assets, the special liquidators will offer IBRC’s loan assets for sale either as loan portfolios or individual loans.”

Existing IBRC clients may refinance their loans at par before November. According to the statement, the Minister for Finance, Michael Noonan, has instructed that a 4.5% discount be applied to all IBRC loans when determining future cashflows.

Moreover, the minister further instructed that a 2.32% discount be applied to all loan valuations to take into account security andtitle issues that may arise with each loan.

It is believed that there is healthy demand among international investors for the IBRC loanbook, particularly the cashflow loans. It remains to be seen whether the delay in putting the loans up for sale will have an impact on demand.