KPMG selects four-strong panel to re-value IBRC’s €7.9bn UK loan book

IBRC’s appointed joint special liquidator, is expected to appoint Savills, Jones Lang LaSalle, Allsop & Co and CBRE as the panel of valuers to re-value the assets underlying the IBRC €7.88bn UK commercial property loan book.

ibrc-logoReal Estate Capital, which reported the news earlier this afternoon, added that the four-strong valuation panel are the same as those from two years ago, with their familiarity likely to aid with the required speed.

That process was called Project Phoenix.

This time around, the purpose is to aid as a major input into the revaluation of IBRC’s currently nominally-valued €18.7bn commercial property loan book – comprised of €10.25bn in Irish loans, €7.88bn in UK loans and just €595m remaining in US loans after the $9.6bn August 2011 loan portfolio trade to Lone Star, Wells Fargo and JPMorgan.

KPMG’s Kieran Wallace and Eamonn Richardson, the joint special liquidators, are also expected to appoint a similar panel to revalue the larger outstanding €10.25bn Irish book, with a valuation panel expected to include Savills, JLL and CBRE, and possibly one or two others.

The combined more than 2,000 commercial properties across the UK and Irish loan books are yet to be divided up between the valuers, but with an ambitious timetable for completing the revaluation of all the Irish assets by the end of May, and all of the UK assets by the end of June, the process is expected to begin swiftly.

The ambitious timetable will feed into an overall revaluation of the two loan books, including an assessment of each loans’ performance history, borrowers’ credit worthiness as well as the covenant strength of the underlying tenants and the lease profile of each building.

Borrowers will then be offered to buy back their debt at each loan’s new value, after which loan portfolio sales are expected, which will only be sold if specified hurdle priced are met.

All that remains, will be transferred to NAMA, with the loan servicing mandate the subject of a current tendering process. NAMA hired Capita Asset Services to service IBRC’s existing nominally-valued €41bn IBRC loans within the bad bank, comprising loans originated by Irish Nationwide Building Society and Anglo Irish Bank.

When KPMG were appointed in early February, after Ireland’s parliament the Dáil passed emergency overnight legislation,CoStar News understands that the original timetable for the wind-down of the IBRC’s overall €27.53bn loan book, which includes corporate and home mortgage loans, was just six months, putting the original timescale for all decisions to be concluded by the end of August.

At the time the Irish government said: “It makes very little sense at this point to retain two State organisations, NAMA and IBRC, performing broadly similar functions.

“It is therefore appropriate that the remaining assets of IBRC (i.e., those which are not bought by third parties (following an independent valuation exercise) or those that are not retained by the Central Bank) are transferred to NAMA as part of the special liquidators’ winding‐up of IBRC.”

The Irish government said added that its approach will “improve the health of the Irish banking sector by putting in place a longer‐term solution for a significant part of the structural shortfall of bank financing that has emerged through the banking crisis”.

All parties declined to comment.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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