Oaktree wins NAMA’s Projects Ruby and Emerald

Ireland’s National Asset Management Agency (NAMA) has selected Oaktree Capital Management to buy two portfolios of non-performing real estate loans with a combined face value of €4.7 billion ($5.3 billion).

The US private equity firm is set to buy the so-called Projects Ruby and Emerald loan portfolios after beating competition from Cerberus Capital Management and Lone Star. The deal was first reported by Bloomberg and subsequently confirmed to Real Estate Capital by a person with knowledge of the situation.

It is understood that Projects Ruby and Emerald, which contain debt mainly secured by Irish commercial and residential real estate, are to be sold at a significant discount to face value.

Last December, Real Estate Capital reported that NAMA was working on the final composition of the two portfolios, which at the time were due to be sold separately. Back then, the portfolios’ combined face value was expected to be in the region of €6.5 billion. The agency subsequently decided to market the portfolios simultaneously.

By the time the two books were put up for sale in March through Cushman & Wakefield, Project Emerald had a par value of around €2.5 billion and featured 16 borrower connections and 236 underlying properties. By value, the underlying assets comprised 53.6 percent commercial, 21.5 percent residential, 18.1 percent land and development sites and 6.7 percent hotels and leisure assets. Around 20.8 percent of the underlying assets were located in County Dublin with 51.7 percent in the rest of Ireland, 20.9 percent in Germany, 3.3 percent in the UK and 3.3 percent in the rest of Europe.

Project Ruby had an outstanding par balance of €2.2 billion, with 15 borrower connections and 253 underlying properties. By value, the book comprised 63.5 percent commercial assets, 15.2 percent land and development sites, 11.8 percent residential and 9.5 percent hotel and leisure properties. The majority of the assets, 28.5 percent, were located in County Dublin, 28.4 percent in County Galway, 41 percent in the rest of Ireland and 2.1 percent elsewhere in Europe.

The sale process is being handled by Federico Montero, Cushman & Wakefield’s head of loan sales who has left the company since the sale process was launched, but has continued to lead it on a consultancy basis.

The sale marks another milestone in NAMA’s deleveraging efforts. Last October, the ‘bad bank’ sold the €6.25 billion Project Arrow to Cerberus for around €800 million, taking debt relating to 302 debtors secured by 1,902 properties off its books in a single deal.

Last September, NAMA sold the loans secured by Irish mall Dundrum Town Centre to Hammerson and Allianz Real Estate for €1.85 billion. The Project Jewel sale involved loans with a face value of €2.6 billion and saw NAMA divest a key asset from its portfolio.

In March, Real Estate Capital revealed that NAMA was to sell the €250 million Project Beara loan portfolio through EY. Beara contains loans originally written to the Cork-based Love family and contains debt relating to retail and residential property as well as land. The sale process is ongoing.

NAMA reported this week that it disposed of €8.5 billion of assets during 2015, an increase on the €7.8 billion in 2014 and contributing to €27.1 billion disposed of since the agency’s inception. The carrying value of NAMA’s loan portfolio at the end of 2015 was €7.8 billion, net of impairments, down from €13.4 billion at the end of 2014.