Cerberus Capital Management saw off Apollo Global Management to win the Project Arrow portfolio for around €800 million, which NAMA, Ireland’s bad bank, acquired in 2010 and 2011.
The portfolio comprises loans with debt par balances of €6.25 billion advanced to 302 debtors and secured against 1,906 mixed-use assets. About 90 percent of the assets are located in Ireland and almost 98 percent 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 program 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 12 October
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 €390 million portfolio of mainly non-performing commercial property loans from Dutch bank Van Lanschot for around €260 million. In July, it purchased a Royal Bank of Scotland portfolio of buy-to-let residential mortgages, which had a gross asset value of £549 million, for £225 million.
The New-York based investor has bought about 20 European portfolios of mainly non-performing loans valued at more than €27 billion since the start of 2013, according to Cushman & Wakefield.
This year alone it has acquired assets valued at more than €12 billion, often at significant discounts as low as 23 percent of nominal value.