CarVal snaps up Anglo’s €600m ‘doctors and dentists’ loan book

CarVal, an American investment fund, has emerged as the successful bidder for a €600 million non-performing debt portfolio owed by professionals to the former Anglo Irish Bank.

The loans were extended to lawyers, medical consultants, accountancy partners, sports stars and television personalities by the bank during the boom. This was to allow them participate in property syndicates, buy shares and make other investments.

CarVal is understood to have bought the loans at a discount of greater than 70 per cent. This reflects the mixed financial strength of individual borrowers and the variable levels of recourse that the bank loaned its clients money ranging from zero to a full personal guarantee.

Original equity
In many cases Anglo's private bank division approached its high-net worth clients with investment propositions where it offered to loan syndicates of borrowers not just the debt to buy large commercial properties but also the original equity.

Individual borrowers range from a senior counsel with debts of over €30 million to employees of Anglo Irish Bank with borrowings of a few hundred thousand euro.

The so-called "doctors and dentists" book is tranche eight in Project Stone, a €9.3 billion loan portfolio that KPMG, the special liquidator of Anglo, announced on Tuesday had been sold.

CarVal has been an active bidder for Irish and European distressed assets having raised different multibillion funds to do so. Its Irish assets are managed out of London. Bobby O'Brien, former head of debt restructuring at Bank of Ireland, is an adviser to CarVal on loan portfolios since April 2013.

To date KPMG has sold IBRC loan assets with a par value of some €19.8 billion out of a total book of €21.7 billion.

Commenting, last Tuesday the special liquidators said: “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.”