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Anglo US Loan Book Sold

September 8, 2011

In July’s e-zine we reported that Anglo Irish Bank had begun the bidding process for the sale of its US loan book (click here toview). It has since been reported that private equity firm Lone Starand US banks Wells Fargo and JP Morgan Chase have won the bidding forthe loan book, at an average cost of 80 cent in the dollar.

Valued at $9.65 billion (€6.7 billion) and comprising 251 loans, theloan book is reported to be the largest US loan book put on the marketby a foreign bank and is backed by properties including the Apthorpapartment complex and Ralph Lauren store on Madison Avenue in New York,the Palmer House Hilton in Chicago and shops on Rodeo Drive in BeverleyHills. The portfolio was divided up into eight tranches, 54% of whichwere either sub-performing or non-performing.

It is understood that the total price paid was higher than expectedat between $7-8 billion. Wells Fargo won the bidding on two tranches,totalling between $3-3.5 billion. JP Morgan is reportedly acquiring onetranche, valued at between $1-1.5 billion. The remaining five tranches,comprising non-performing and sub-performing loans with a face value of$5 billion, will be acquired by Lone Star. The deal has yet to befinalised and approved by the Minister for Finance, Michael Noonan.