US hedge funds snap up IBRC mortgage portfolio

Liquidators KPMG say buyers have agreed code of conduct when dealing with mortgage arrears

Tue, Apr 1, 2014, 18:01

Nearly two-thirds of a portfolio of mortgages being sold by the liquidators of IBRC has been purchased by two US hedge funds.

The Project Sand tranche of loans, which have a balance of about €1.8 billion, are mostly residential mortgages that originated with Irish Nationwide. Half of the mortgages are in arrears.

In a statement today, liquidators KPMG said 64 per cent of the loans had been sold to US funds Lone Star and Oaktree Capital.

It had been speculated that the loans would sold at a discount but the sales price was not disclosed.

Liquidators Kieran Wallace and Eamonn Richardson said, however, the buyers had agreed to abide by a code of conduct when dealing with mortgage arrears.

They said they would now begin communicating with loan and mortgage customers to inform them of the outcome of the sales process directly.

The liquidators also announced that 85 per cent of its largest portfolio of real estate loans - known as Project Stone - has also been sold.

The €9.3 billion portfolio of loans, which includes debt held by businessmen Denis O’Brien and Niall McFadden, was bought by Deutsche Bank, Lone Star, CarVal Investors and Goldman Sachs.

Again, the price was not disclosed.

The conclusion of these sales meant €19.8 billion of loans out of a total book of €21.7 billion have now been sold.

“The sales process for the IBRC loans, including their segmentation to meet demand from international buyers, has delivered a very positive result with over 90 per cent of IBRC’s loan assets now sold within 14 months of the Bank’s liquidation,” the liquidators said.

“The response of markets to the liquidation and sales process has exceeded our expectations,” they added.

Minister for Finance Michael Noonan welcomed the announcement, saying “the success of these sales processes” represented a significant milestone for the State.

“This is a hugely successful outcome for the special liquidators which provides further strong confirmation of the renewed confidence of international investors in the Irish economy and its future prospects,” he said.