Belfast Telegraph

Cerberus buys £860m of bad loans from AIB in the Republic

AIB has confirmed a controversial €1bn (£0.86bn) sale of bad loans in the Republic, including mortgages, to US fund Cerberus
AIB has confirmed a controversial €1bn (£0.86bn) sale of bad loans in the Republic, including mortgages, to US fund Cerberus

By Ellie Donnelly

AIB has confirmed a controversial €1bn (£0.86bn) sale of bad loans in the Republic, including mortgages, to US fund Cerberus.

It comes five years after the New York private equity fund bought a portfolio of loans and property in Northern Ireland from the Republic's bad bank Nama for £1.25bn.

The assets, known as Project Eagle, were estimated to have been worth around £4.5bn.

The AIB portfolio is being sold to Everyday Finance, as part of a consortium with Everyday and affiliates of Cerberus Capital Management.

The portfolio consists of 2,200 non-performing customer loans in the Republic, around 95% of which have been non-performing for over two years.

The portfolio is predominantly made up of properties, and includes limited agricultural exposure.

The average balance per customer loan is €500,000 (£427,000) and the portfolio extends across 5,000 assets. Around 10% of the loans include the family homes of customers, as the home "is cross-secured to wider commercial connected debt", AIB said.

The portfolio excludes performing restructured customer loans.

The bank said it would be contacting impacted borrowers to inform them that their loans are being transferred, and to confirm existing legal and regulatory protections remain in place.

The loan portfolio has a gross non-performing exposures value of €1bn (£0.86bn) and a fully loaded risk weighted assets position of €0.75bn (£0.64bn).

In the year to December 2018, the loan portfolio incurred a loss of €11m (£9.4m).

Once the sale is completed AIB will receive cash consideration of approximately €800m (£684m), with the proceeds being used for general corporate purposes "including the continuation of support for customer restructuring" the bank said.

Belfast Telegraph

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