IBRC loan sale includes Sunderland Stadium of Light

Non-performing loans portfolio of €6bn to be sold off by end of year

One of the loans included in this month's multibillion sale by the Irish Bank Resolution Corporation to international investors is a £27 million loan secured against Premier League Sunderland's home, the Stadium of Light.

The €6 billion portfolio of non-performing loans held by IBRC is to be sold off by the end of the year, or transferred to the National Asset Management Agency, though investors are balking at the conditions set by Minister for Finance Michael Noonan.

The Stadium of Light is valued at just over £100 million, while the loan – one that was offered to investors in the club by Anglo-Irish Bank during its heyday – is priced at a margin of Libor plus 3 per cent, CoStar News reported.

Seven loans, with £156 million still outstanding upon them, are secured on nearly 300 freehold pubs valued at £215 million, that are owned through GRS Pubs Limited, the property company subsidiary of London Town plc, which has been in administration since February 2010.

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One of the loans, a £32.05 million facility, is in breach of its covenant and as a result is repayable on demand, which the firm's auditor, BDO, has confirmed it does not currently have the cash to do if requested, the property magazine reported.

Mr Noonan imposed two conditions last May in a bid to ensure against a fire sale of debt, capping the discounts on future cash flows and asset valuations at 4.5 per cent and 2.32 per cent respectively – though some bidders feel that demands artificially high prices.

Nearly half of the loans have expired, while 123 loans have an outstanding balance in excess of €120 million, but the projects on which the loans are secured produced nearly €800 million in cash over the 13 months to the end of July.

In all, there are 816 loans from 319 individual borrowers and 217 loan syndicates with a gross unpaid balance of £4.82 billion, against a recorded real estate value of £3.94 billion, implying an overall LTV of 122.3 per cent.

A significant proportion of the loans are secured upon British properties, including student accommodation blocks in Manchester, London and Sheffield and rental apartments in Plymouth and Manchester.

Nineteen of the loans were made by Anglo Irish Bank to Israeli property developer Meir Gurvitz, through companies linked to his Arazin Investments. Up to now, £122 million is still outstanding on those loans, while the properties are worth approximately £104 million. Seven properties in Germany stand as security for a €241 million Anglo Irish Bank senior loan given to finance a joint venture investment in German retail between Taurus Capital Markets, a subsidiary of Taurus Investment Holdings, and Anglo Irish Bank Private Banking.

Meanwhile, loans tied to four companies belonging to Northern Irish investor and former boxing promoter Barney Eastwood are also to be sold.

Mark Hennessy

Mark Hennessy

Mark Hennessy is News Editor of the The Irish Times