Ireland's "bad bank" sold its entire portfolio of loans belonging to Northern Ireland-based debtors on Friday in its largest deal to date, cashing in on surging international demand. The loans, which had a par value of 4.5 billion pounds ($7.5 billion), were sold to affiliates of private equity firm Cerberus Capital Management, L.P. for more than the 1.3 billion pounds minimum reserve price, a source familiar with the operation told Reuters.
The National Asset Management Agency (NAMA), which paid 1.3 billion euros ($1.8 billion) when it took over the portfolio and had clawed back 100 million euros through disposals by the end of 2012, did not disclose the terms of the transaction. NAMA, one of the world's largest property groups, paid out 32 billion euros to purge Irish banks of risky loans worth 74 billion euros after a real estate crash wrecked the economy and pushed the country into a bailout in 2010. Seen as a major liability to Dublin's finances until quite recently, the state-run agency is now benefiting from a surge of demand from abroad and has been asked by the government to see if can offload all its assets before a deadline of 2020.
"This transaction represents a significant achievement for NAMA. We are satisfied that the sales process will deliver the best possible result for the Irish taxpayer," it said in a statement. The deal follows confirmation this week by liquidators to the collapsed Anglo Irish Bank that they had sold more than 90 percent of a loan book with a par value of 21.7 billion euros, a result that exceeded all initial expectations.
The liquidators' sales, which were snapped up by the likes of Lone Star and Deutsche Bank over recent weeks, also came as a boost for NAMA, which will take over the residual book. It had anticipated a far larger transfer of loans. Friday's sale was also hailed as good news for Northern Ireland. At 4.5 billion pounds, the par value of the book is equivalent to about 15 percent of the British-controlled province's economy.