Lone Star to buy PTSB loans for €1.3bn

By Geoff Percival

US private equity firm Lone Star has won the race to acquire Permanent TSB’s €2.2bn ‘Project Glas’ portfolio of non-performing home loans.

Via its Start Mortgages retail credit affiliate, Lone Star will pay a net €1.3bn for the portfolio, which generated operating income of approximately €8m last year.

Project Glas contains non-performing loans linked to around 10,700 properties — comprising 3,300 buy-to-let properties and 7,400 private dwelling houses. Permanent TSB said 2,500 of the loans are classed as “not co-operating” and 3,850 have refused treatments. The average arrears time of the loans is three-and-a-half years, with the average arrears value €28,800.

Permanent TSB said it will use the proceeds from the cash sale for general corporate purposes.

The Irish lender had pushed back the bid deadline to late July after distressed debt firm Cerberus reportedly exited the race. In May, Cerberus acquired a €1.1bn portfolio of bad commercial loans from AIB. As well as Lone Star, Goldman Sachs and Oaktree Capital Management were linked to the Permanent TSB sale.

Each have also been linked to the bidding process for Ulster Bank’s auction of €1.6bn worth of distressed mortgages, the deadline for which closes on Friday.

Permanent TSB chief executive Jeremy Masding said the bank remains committed to reducing its non-performing loan ratio to single digits in the near term.

“Reducing NPLs is a necessary step for us to take to complete the rebuilding of PTSB as a viable, competitive lender,” said Mr Masding.