US BANKS Wells Fargo and JP Morgan Chase and Texas-based distressed debt investor Lone Star have won the bidding for Anglo Irish Bank’s $9 billion (€6 billion) US loan book at an average cost of about 80 cent in the dollar.
The three beat some of the largest US private equity firms for one of the largest portfolios of loans to reach the American commercial property market in recent years.
The total price paid for the loans was between $7 billion and $8 billion, according to the Reuters news wire service, which cited a source familiar with the transaction.
The names of the successful bidders were reported by the Bloomberg news wire at the weekend.
The sale price for the portfolio was higher than expected.
The portfolio was divided up into eight pools of loans, more than half of which were either sub- or non-performing.
Wells Fargo, which has recently agreed to buy $1.4 billion in US loans from Bank of Ireland, won the bidding on two tranches of Anglo’s US loans totalling between $3 billion and $3.5 billion.
JP Morgan is acquiring between $1 billion and $1.5 billion in one pool of the bank’s US loan book.
Lone Star is acquiring the remaining five pools of non-performing or sub-performing loans which have a face value of $5 billion.
Final bids were submitted last week ahead of the winning tenders being chosen last weekend, but deposits have yet to be paid and the deals are not expected to be finalised until later in the autumn.
The Department of Finance and Anglo declined to comment.
The bank said at its half-year results last week that the book was “well bid”.
Bidders included private equity firms such as TPG Capital and Blackstone Group.
The Irish banks are shedding their overseas assets to shrink the size of their balance sheets to return to self-sufficiency and to repay cheap funding to the Irish and European central banks on which they have become reliant.
The demand for the Anglo portfolio was strong given that the bank had not syndicated the loans on to other lenders, creating an opportunity for buyers to seize control of the underlying properties.
The bank aggressively grew the portfolio during the peak years of the US property boom from 2005 to 2007.
Anglo is being advised by property broker Eastdil Secured and FTI Consulting on the sale.
The loans include the Apthorp apartment complex and Ralph Lauren store on Madison Avenue in New York, the Palmer House Hilton in Chicago, and shops on Rodeo Drive in Beverly Hills.
