Anglo restructures securities on assets of Howard Holdings

Sat, Nov 14, 2009, 00:00

STATE-OWNED ANGLO Irish Bank has restructured securities it holds over the assets of developer Howard Holdings assets in a move understood to be in preparation for moving its loans to Nama.

At the end of August, the bank registered a series of charges – securities against money it has loaned – over a number of subsidiaries of Howard Property Ireland, the group’s main holding entity in this country.

The charges were agreed on August 27th and registered four days later.

The subsidiaries involved were set up to manage a number of Howard property developments. The move is understood to be a precursor to moving the loans involved to State’s bad bank rescue agency Nama. Anglo was one of Howard’s bankers and Companies Office records show it holds a range of securities over various company assets, including a €12.5 million charge over book debts.

Howard was one of the most active property players in the boom – at one stage it had assets of €4 billion under development. It is the main private investor behind the proposed €1 billion Atlantic Quarter in Cork’s docklands. It was also developing a conference and event centre there in partnership with the local authority.

Howard Holdings plc in Britain was wound up earlier this year. The company was a shareholder in Howard Property Ireland, along with Brendan Murtagh, Lee Madden and Greg Coughlan.

It subsequently emerged a new business, Clowater, led by Howard managing director Jason Clerkin and development director Paul Hannon, took over the management of some Howard properties.

It is likely loans relating to at least some of the assets under this company’s management will be taken over by Nama.

In cases where loans are performing, the developers will simply end up repaying the agency instead of their banks. The financial institutions themselves will continue to manage the loans on a day-to-day basis on Nama’s behalf.

The Oireachtas this week passed the legislation needed to formally establish the agency, which has been operating on an interim basis since the summer.

The Government confirmed acting chief executive Brendan McDonagh in his role, and the agency is expected to begin its work in earnest. As a result, the Irish banks involved – Anglo, AIB, Bank of Ireland, Irish Nationwide and the EBS – are laying the groundwork to transfer ownership of loans to the agency.

Anglo Irish will receive Government bonds worth €28 billion, of an estimated total of €54 billion. The bank was one of the biggest lenders to developers during the boom and its exposure to collapsing property values in its main markets ultimately led to the State taking control earlier this year.