Half of Shelbourne Hotel loan is sold

Half of the outstanding €206 million senior loan held by Bank on Ireland on the Shelbourne Hotel in Dublin has been bought by international property investors, Kennedy Wilson, it has emerged.

Bank of Ireland and Anglo Irish Bank funded the acquisition and expensive refurbishment of the St Stephen's Green hotel, which was bought in 2004 by five investors: Bernard McNamara, John Sweeney, Bernard Doyle, Jerry O'Reilly and David Courtney.

Both banks held equal €103 million stakes of the outstanding senior loan. The decision by Bank of Ireland to sell its holding to Kennedy Wilson comes just weeks after the US-headquartered investor sold its stake in the bank for a significant profit.

The sale of the Shelbourne was off-market, so no price has been revealed, but CoStar News last reported that the hotel was valued at €80 million in 2008 – a fraction of the original investment, though its price would have improved.

The senior loan expired in December 2009, according to filings made by Shelbourne Hotel Holdings Limited (SHHL) which owns the hotel in partnership with Rotuma Limited. The companies have the same directors. It has been repayable on demand since then, CoStar reported.

Kennedy Wilson was one of five North American investors - i that injected capital into Bank of Ireland in July 2011, staving off nationalisation.