IBRC liquidators confirm anticipated major loan portfolio sale process

KPMG’s Kieran Wallace and Eamonn Richardson, the joint special liquidators of IBRC, have confirmed that the majority of the failed bank’s legacy circa €18bn UK and Irish commercial property loans will be sold through large loan portfolio sales.

ibrc-logoConcurrent with writing to the underlying IBRC borrowers from this week, the joint special liquidators have issued a statement in the last hour confirming the expected trajectory.

The statement said: “It is currently anticipated that the substantial majority of IBRC loans and collateral obligations will be offered for sale by way of large loan portfolios.”

In addition, the special liquidators anticipates a relatively small number of loans will be offered for sale individually “rather than offering those loans and collateral obligations for sale in a larger portfolio”.

KPMG’s liquidators has reorganised IBRC’s legacy circa €18bn UK and Irish commercial real estate portfolio into three separate portfolios – projects Rock, Sand and Salt, as revealed by CoStar News at the beginning of the month

The statement added: “Prior to the commencement of the sales process, borrowers will be notified of how their loans and collateral obligations will be disposed of by the special liquidators.”

The special liquidators also said borrowers have “an opportunity to make written representations on the method of disposal of their loans and the criteria for determining who may bid for their loans and collateral obligations”.

Written representations by borrowers “will be considered by the special liquidators along with their professional advice before they arrive at their decisions,” continued the statement, implying Wallace and Richardson’s willingness to consider borrower debt repurchasing, as expected.

The statement continued: “Where no bid is received, or the bids received by the special liquidators are not in excess of the valuation price, the special liquidators will be required to sell those loans and collateral obligations to NAMA at the valuation price, unless otherwise provided for by the Ministerial Instructions.”

The possibility of potentially moderated Ministerial Instructions is an important subtle point here.

There has been concern raised that the parameters which the Ministry of Finance has set for the revaluation of the loans could lead to a price gap for loans revised net present value – between the valuations arrived at by PwC and open market bids.

This potential problem was analysed in detail (in the second part of this report) here.

Letters will by the special liquidators to all IBRC borrowers in a number of tranches commencing this week due, in part, to the scale of the process, the size of the IBRC loan book, and the time objective.

The statement confirmed that the special liquidators are taking professional advice on the appropriate method of disposing of loans and collateral obligations, and on the appropriate criteria for determining who may qualify to bid for loans and collateral obligations.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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