Cerberus clears €860m loan linked to Project Eagle

Documents show US vulture fund has repaid loan used to part-fund Nama deal

US vulture fund Cerberus appears to have cleared an €860 million loan used to buy Nama's Northern Ireland loans in a deal that is now the subject of several investigations.

Cerberus's €1.6 billion purchase of the loans, dubbed Project Eagle, is the subject of an inquiry by the Dáil's Public Accounts Committee (PAC), as well as investigations by the US and UK authorities, following claims that business people and politicians were to benefit from the deal.

Documents filed by Promontoria Eagle, the company Cerberus used to buy the assets in mid 2014, indicate that it has cleared a £729.2 million (€859 million) loan from Japanese lender Nomura International, used to part-fund the deal.

The filings, lodged with the Companies’ Registration Office (CRO), show the debt was secured through six charges against assets acquired as part of the deal.


Promontoria Eagle filed a series memos stating that all these charges had been “satisfied”, indicating that the loans had been repaid, with the CRO between May and September this year.

Documents the company filed in June 2014, when Promontoria Eagle took control of the loans, due to Nama from more than 50 developers based in Northern Ireland, give some details of the properties against which the debts were ultimately secured.

Some show that part of the debt was secured against the Savoy Shopping Centre and other premises in Glasgow, Scotland, owned by Mar Properties, a business run by developers Noel Murphy, Adam Armstrong and William Rush, whose debts Cerberus acquired as part of the deal.

Many of the bigger developers in Project Eagle paid off Cerberus within a short time by refinancing, that is borrowing the cash from another source to repay the US fund. One of the bigger borrowers, developer Paddy Kearney’s Kilmona, refinanced its debt with another US company, Jefferies Loan Core.

Unpaid debts

The unpaid debts in Project Eagle amounted to close to €6 billion. The deal gave Cerberus the right to demand full repayment or take control of the properties against which they were secured but, as it bought loans at a discount to their value, it was able to accept less that the full amounts due from developers who refinanced.

Its chief operating officer and Promontoria Eagle director Mark Neporent, told the PAC that Cerberus preferred to work with borrowers rather than taking steps such as appointing receivers to their properties. The company helped arrange refinancing for the Project Eagle developers.

Cerberus refused to comment on the specifics of the Nomura loan, but its accounts show the loan was due for repayment in June 2017. The interest paid was linked to inter-bank rates and it was classed as a senior loan, which meant it had to be repaid before all others in the event of a liquidation.

The US company itself provided the balance of the purchase price by loaning it to Promontoria Eagle through a Dutch subsidiary, Promontoria Holding 83 BV. High interest rates demanded by its sister company meant Promontoria Eagle paid little tax on the returns generated.

Cerberus became embroiled in the Project Eagle row when it emerged that it had hired US lawyers Brown Rudnick and Belfast solicitors Tughans, for £15 million, to aid its bid in late March 2014, shortly before Nama accepted its offer for the loans.

Cushnahan link

The lawyers were linked to Frank Cushnahan, who had been a member of Nama's Northern Ireland Advisory Committee until October 2013. Brown Rudnick attempted to negotiate a £16 million fee from another Project Eagle bidder, Pimco, that the three were to split.

Pimco left the auction after telling Nama of the talks in early March 2014 and the lawyers then moved to Cerberus. A letter from Brown Rudnick's chief executive, Joseph F Ryan, to the PAC said that, following Pimco's departure and before his firm and Tughans switched sides, they agreed that Mr Cushnahan would have no further involvement in the transaction.

His letter also stated that Brown Rudnick partner Tuvi Keinan met Frank Cushnahan in late 2012, while he was still on the Nama committee, along with the then head of Tughans, Ian Coulter.

Comptroller & Auditor General Séamus McCarthy criticised Nama’s handling of the potential conflict of interest involving Mr Cushnahan in a report published recently.

Independent TD Mick Wallace has highlighted a number of other claims relating to Mr Cushnahan in the Dáil. The deputy first raised questions about Project Eagle in the middle of last year, setting in train a series of investigations.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas