Cerberus wins NAMA’s €6.25bn Project Arrow

Cerberus Capital Management has won NAMA’s €6.25bn Project Arrow portfolio of real estate loans for around €800m.

The US investor saw off Apollo Global Management for the portfolio, which NAMA, Ireland’s bad bank, acquired in 2010 and 2011.

The portfolio comprises loans with debt par balances of €6.25bn advanced to 302 debtors and secured against 1,906 mixed-use assets. About 90% of the assets are located in Ireland and almost 98% of them have non-performing loan (NPLs).

“The sale of Project Arrow represents another significant deleveraging and risk mitigation milestone in NAMA’s progress towards fulfilling its key strategic objectives,” said Brendan McDonagh, chief executive of NAMA.

“The cash proceeds raised from the sale will be applied towards redeeming NAMA’s senior debt and towards funding our planned investment programme in housing and commercial office space.”

Project Arrow was launched in July attracting interest from 17 prospective bidders. Five bidders put forward bids of which three, Cerberus, Apollo and a joint bid from Goldman Sachs and CarVal Investors, were shortlisted.

Goldman Sachs and CarVal withdrew from the process in September leaving Cerberus and Apollo to submit binding bids on Oct 12.

On Friday afternoon, NAMA said Cerberus had been selected as preferred bidder “on the strong and clear recommendation” of Cushman & Wakefield, the loan sale advisor.

The purchase is another big NPL win for Cerberus, which has been the most aggressive of the US investors scooping up European loan books.

In August, it bought a €390m portfolio of mainly non-performing commercial property loans from Dutch bank Van Lanschot for around €260m. In July, it purchased a Royal Bank of Scotland portfolio of buy-to-let residential mortgages, which had a gross asset value of £549m, for £225m.

The New-York based investor has bought about 20 European portfolios of mainly non-performing loans valued at more than €27bn since the start of 2013, according to Cushman & Wakefield.

This year alone it has acquired assets valued at more than €12bn, often at significant discounts as low as 23% of nominal value.