Equity release group Seniors Money eyes return to mortgage market

The Irish-based management team of boom-time "reverse mortgage" provider Seniors Money has bought full control of its Irish and Spanish units from majority backer Quadrant Private Equity and private New Zealand investors.

As property prices soar once again, the company is seeking finance to re-enter the market with its signature product: equity-release home loans to elderly people whose debts are later repaid from their estates after they die.

Seniors Money's products were popularised in the property boom by television ads featuring the late actor Mick Lally, who played Miley in Glenroe. The lender has a loan book in the Irish market of close to €250 million, but it stopped writing new business in recent years due to a lack of funds to lend.

Derek Handley, who runs Seniors Money in Ireland, said the transaction was part of a "restructuring" of the wider group, whose former parent is headquartered in Auckland. He said the company was currently in negotiations with financiers to reopen its Irish book for fresh lending.

Central Bank fines Dublin-based insurer PartnerRe €1.5m

---

Bank of Ireland to sell first set of ‘bail-inable’ senior bonds

---

Can new Ulster Bank CEO make it easier for boss to sleep at night?

---

Insurer Friends First buys Eyre Square building for €22m

---

Mr Handley, a former marketing director of Esat Digifone, confirmed his involvement in the restructuring transaction alongside fellow Irish-based Seniors Money directors John Moriarty and Stephen Gunning.

All three were investors in the business alongside Australian outfit Quadrant and others. Former prime minister of New Zealand Jenny Shipley was formerly chairman. Its Australian and New Zealand units were sold in 2014.

Backing

The Irish-based managers have secured backing from Deutsche Bank to take on full control of the business.

Using a newly-formed entity, Senmo Quantum, they have bought from the wider Seniors Money group three Dublin companies that together comprise the Irish and Spanish operations.

Deutsche has provided finance for the undisclosed consideration for the shares, as well as cash to repay €8 million in loans to the parent. Deutsche has also agreed to lend funds “to be used to repay certain financial indebtedness”.

“This is part of a broader refinancing,” said Mr Handley. “We would hope to re-enter the Irish market with new lending. We are speaking to different partners who might be able to help with financing for that. It is not imminent.”

He insisted there was still a “tremendous opportunity” in the Irish market for reverse mortgages: “We are coming through an economic cycle. The population is ageing. There will be a demand for the product.”

The latest accounts, to the end of March 2017, for one of the entities being acquired, Seniors Money Mortgages (Ireland), state that its loan book is financed until the end of September 2019. The directors bemoaned a lack of funding “at competitive rates”, but said they were confident the “constraints would ease” in the coming year.

They highlighted ongoing discussions “which may facilitate writing new business in Ireland”. The accounts showed that the €246 million loan book threw off gross income of €9.1 million. It has bank loans of €201 million.

During the year, the New Zealand parent group charged the Irish arm €3.8 million to cover the cost of shortfalls between the total amount due on loans when customers passed on and the net proceeds from the sale of the underlying property. This reflects the scale of the collapse in Irish property prices from when much of the loan book was originally written.