State may be left with Anglo loans

Ireland may be left with a large portion of the former Anglo Irish Bank’s loans even as sovereign wealth funds, private-equity funds, and banks circle the first assets for sale, said Kieran Wallace, joint liquidator of the failed lender.

The first portfolio, codename Project Evergreen, has a par value of €3.5bn, said Mr Wallace. Thirteen loans in the portfolio will be sold by the liquidators at KPMG, appointed by the Government to wind up the bank. The total loan book for sale has a par value of €22bn.

Anglo Irish’s implosion following a property collapse five years ago pushed Ireland to the brink of bankruptcy in 2010, as its bailout cost neared €35bn.

Finance Minister Michael Noonan ordered the liquidation of the lender in February, and told the National Asset Management Agency to take over unsold loans.

“A large portion will still more than likely go to Nama, but we’re not disappointed by the level of external interest,” Mr Wallace said, adding the book has drawn “very significant” interest.

“Given the nature of this portfolio, it certainly will be one of the more attractive to external investors.”

Indicative bids for the Evergreen loans are due by Oct 11, said Shane McCarthy, who is helping run the sale process at KPMG.

Loans to Topaz Energy Group, broadcaster TV3 Group, and retailer Arnotts Holdings are earmarked to be auctioned individually, the Sunday Business Post reported on Sept 15, without revealing its source.

The liquidators plan to start marketing two other loan books, €7.8bn of mainly UK commercial real estate assets, and €1.8bn of Irish residential mortgages, in the middle of next month.

Mr Wallace said he expects “a number” of borrowers will move to buy out their loans “at par” to avoid them being sold to a third party. Ireland’s surviving banks are preparing to finance some potential loan bidders, he said.

“That’s a sign that there are some good businesses banked by” the lender, said Mr Wallace. “These are bankable propositions.”

Mr Noonan has told Nama to take over whatever loans the liquidators can not sell by the end of the year at a reserve price being set by independent valuers.

Mr Noonan will have to reimburse Nama if the entire loan book is sold for, or independently valued, at less than €12.9bn. That is how much Nama paid the Central Bank this year to buy out the part of the regulator’s emergency loans to Anglo Irish.