Bond buyer makes shortlist for €810m NAMA non-performing Irish loan portfolio sale and, with Starwood, pursues German bank’s £5bn UK book
Pimco is in the frame to buy two of the biggest real estate loan portfolios up for sale in Europe.
The world’s biggest bond buyer is one of three parties shortlisted from 40 initial bids to buy Project Aspen, the €810m Irish non-performing loan portfolio Ireland’s National Asset Management Agency (NAMA) put up for sale in January.
But it is up against the borrower, David Courtney, who is working in partnership with Starwood and Irish corporate finance boutique Key Capital. The third shortlisted bid came from private investors the Reuben brothers.
Pimco is also trying to buy the £5bn UK loan book of Eurohypo, this time in partnership with Starwood. The pair are up against Lone Star, which is bidding with Wells Fargo.
This month, Pimco signalled that it is stepping up its interest in European real estate by hiring Laurent Luccioni in a new post of European head of commercial real estate. Luccioni resigned as European head of MGPA at the start of the year.
If successful in its bid for Eurohypo’s book it is dthought Pimco would take the performing loans – the majority of the book – and Starwood the on-performing debt. Similarly, if the Lone Star/ Wells Fargo partnership prevailed, Lone Star would want the distressed debt and Wells the good book.
But there is some scepticism in the market about Commerzbank’s intentions for its Eurohypo subsidiary and the UK business. The bank has appointed Barclays Capital to review the options, which are understood to include a sale of the business as a going concern. Two Australian banks, one being Macquarie, are said to be separately considering buying the business.
“Entertaining the Starwood/Lone Star bids could be a pricing exercise,” said one debt investor.
The Aspen portfolio is seen as a test sale for NAMA, which has not yet sold loans, as opposed to assets, in any significant quantity.
NAMA is not allowed to sell debt directly back to borrowers. It is believed to have been approached before the Aspen portfolio went on the market by Key Capital about selling the assets. A source said: “NAMA will sell more loans in Ireland. There is a view that it is better to sell assets, but the reason for selling loans is to sell bigger portfolios quicker, and more mixed assets. It tends to be where someone has approached us to express an interest, then we have to sell on the open market.”
Aspen garnered great interest from potential buyers; bidders that submitted lower offers included Kennedy Wilson, TPG/Green Property, Lone Star and Catalyst Capital. Eastdil Secured is running the sale.
Loan sales were predicted to take off in Ireland this year, following Lloyds’ sale of the Project Lane loan portfolio to Apollo and Project Pittsburgh to CarVal late last year, and because the other Irish ‘bad bank’, the Irish Bank Resolution Corporation, was gearing up to offload its €26bn (par) book.
But on 6 February, the Irish government announced IBRC was being liquidated. Savills, CBRE, Jones Lang LaSalle and Allsop & Co are expected to be appointed to revalue the book in preparation for sales this summer. Any loans not sold at or above the new valuations will be sold to NAMA at the valuation price.