NAMA readies €1bn projects Aspen and Club NPLs

By James Wallace - Thursday, January 24, 2013 15:40

Ireland’s National Asset Management Agency has pooled two non-performing loan (NPLs) portfolios, projects Aspen and Club, which have a combined outstanding debt of more than €1bn.

Project Aspen is an Irish NPL, which thought to have a near €800m outstanding loan balance, while Project Club has a nominal balance of around €230m, as reported by CoStar News in an analysis of the outlook for the European loan portfolio sales market.

Eastdil Secured has been mandated to sell Project Aspen, which is also currently selling Lloyds Banking Group’s German retail-focussed €850m Project Chaminox.

In the first week of the year, CoStar News revealed that the shortlist for Project Chaminox comprised Cerberus Capital Management, Apollo Global Management, Goldman Sachs Special Situations Fund and Morgan Stanley Real Estate Funds. 

Projects Aspen and Chaminox both share a ski resort-inspired moniker. 

NAMA’s €230m Project Club is to be sold by CBRE, in the property services giant’s only second such NPL sale mandate after NAMA also appointed CBRE to the €600m Project Island portfolio. 

The projects Aspen and Chaminox are thought to be the first Irish loan portfolio sales which NAMA has sanctioned, which is at least in part owing to the greater political sensitivity in the bad bank selling off effectively state assets at discounts to present fair value.

While projects Aspen and Club are thought to have a nominal balance of circa €800m and €230m, respectively, it is worth remembering that NAMA’s purchase price would have been considerably lower.

The figure is possibly even lower still than the blended 58% average discount at which the entire commercial real estate portfolio was acquired. 

NAMA’s success at de-leveraging through loan portfolio sales so far has been modest. Last year’s €600m Project Island portfolio, comprised of 40 development loans extended to property developer Cyril Dennis, collapsed after Orion Capital Managers was selected as preferred buyer.

Last year, NAMA also sold a single £40m single loan to Development Securities in October, secured against 17 investment and development assets located in London and the South East of England. 

Back in August, NAMA also sold the Chrome portfolio for £103m to a DevSecs and Pears Group joint venture. The Chrome loans, secured against 39 investment and development assets, were originally extended to property developer Gerry Gannon, one of NAMA’s top 10 most heavily-indebted borrowers.

The single largest Irish NPL sale last year was Allied Irish Bank’s €660m Project Kildare sale to Lone Star, which drew criticism in Ireland for the loss of long term economic value in the 400-strong underlying largely Dublin property.

AIB, which is 99.8% owned by Ireland’s government, has been criticised for selling the loan portfolio at a circa 60% discount which effectively transferred the long term economic value (LTEV) of the portfolio to Lone Star.

Unless there is a material change in the political temperature around Irish asset sales, NAMA loan portfolio sales will be careful, small and ultimately slowly disentangled from the bad bank’s circa €70bn loan book.

Lloyds is still to close to the Irish CRE loan portfolio sales includes a hangover of two Lloyds Banking Group loan portfolios which were agreed in December: the circa €1.8bn (£1.46bn) Project Lane which will trade to Apollo Global Management’s Risali Limited for €184m (£149m), and the €380m (£308.3m) Project Pittsbourgh  which is to close with CarVal Investors for €95m (£77m).

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