Deals

Lone Star among winners for $10bn Anglo Irish loan book

The Dallas-based private equity real estate giant prevails alongside Wells Fargo and JPMorgan Chase & Co with winning bids for the 248-strong US real estate loans portfolio.

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The winning bids for the largest US loan book to come to market since the start of the credit crunch have been determined.

According to multiple reports, Lone Star Funds, the Dallas-based private equity real estate firm and investment banks Wells Fargo and JPMorgan Chase & Co, have been selected as the winners of a series of loan pools, valued at a combined $9.65 billion, offered for sale by struggling Irish bank, Anglo Irish Bank

In a report by Reuters, the bank stands to make between $7 billion and $8 billion from the sale of the 248-loan portfolio of perfoming, sub- and non-performing loans made against a wide mix of different property types across the US. The sale process, which began in July, was led by Eastdill Secured.

Lone Star’s winning bid, which beat rival bids from firms including The Blackstone Group and TPG Capital, was for the non-performing loan component of the portfolio, which comprises 148 loans with  a face value of $5.13 billion, an average loan balance of $35 million and a weighted average maturity of 21 months, according to a sales document obtained by PERE.

Those loans comprised more than half the entire portfolio and reflected five of eight pools of loans offered for sale. The other three pools, comprising 100 performing loans with a face value of $4.52 billion, an average loan balance of $45 million and an average weighted maturity of 41 months, are to be acquired by Wells Fargo and JPMorgan Chase & Co.

Anglo Irish was moved to sell the loans predominantly as a result of an aggressive lending spree in the years leading up to the credit crunch. Its strategy was rife among Irish lenders at the time and was a big contributor to the country’s ensuing economic woes.

Asset sales among the Irish lenders, which have received government investment since, were something of a stipulation by European Central Bank which lent the country €85 billion in bailout capital last year. These sales are expected to help Anglo Irish meet some of its bailout obligations.