Lone Star through to final stage of bidding on AIB soured loans

Cerberus also among potential buyers of portfolio of mortgages and business loans

AIB is working to cut its level of bad loans towards the EU average of 3.4 per cent. Photograph: Julien Behal/PA Wire

AIB is working to cut its level of bad loans towards the EU average of 3.4 per cent. Photograph: Julien Behal/PA Wire

 

Lone Star Funds is said to be one of at least three bidders to have progressed to the second stage for an AIB portfolio of soured loans, according to a person familiar with the matter.

Cerberus Capital Management LP is also among the potential buyers to have gone through to the final round of the sale process, according to a second person, who asked not to be named as the information is private.

The next stage of the sale process is expected to begin in February, with the deal likely to conclude in the second quarter.

The portfolio, made up of mainly of mortgages and business loans, has a par value of more than €3 billion. Previously transactions point to the portfolio selling for about a third of that. Lone Star and Cerberus declined to comment. AIB declined to comment on the bidders.

Project Beech, as the portfolio is called, is the latest loan sale by AIB, which is working to cut its level of bad loans towards the EU average of 3.4 per cent. About 11 per cent of the bank’s gross loans were classed as non-performing at the end of September.

Beech is the latest in a line of loan sales involving Irish banks. Permanent TSB Group Holdings sold its Project Glas portfolio to Lone Star for about 1.3 billion in July, while Bank of Ireland Group has said it’s considering all options to reduce its bad loan levels. – Bloomberg