Lloyds’ €1.5bn Project Hampton shortlists emerge as KPMG’s €7.8bn Project Rock NPL out next week

Lloyds Banking Group has drawn up shortlists for each of the three sub-pools for the €1.5bn Project Hampton Continental European property loan portfolio. 

Project Hampton is comprised of three sub-pools – projects Alpha, Bravo and Charlie – split by geography of underlying real estate, and are now expected to trade separately.

CoStar News understands that the circa €200m Project Alpha sub-pool, comprised of Spanish loans, is expected to trade in first, in the coming week, with Lloyds seeking to capitalise on more competitive pricing that the bank had envisaged.

The final shortlist for Project Alpha is comprised of Blackstone, HIG Capital, Colony Capital, Davidson Kempner and Bank of America Merrill Lynch (BAML), CoStar News can reveal.

In addition to the new entrants in the second round, BAMLs appearance as an equity bidder is also notable illustrating a deepening of the investment bank’s strategy.

There are also two separate, but overlapping, five-strong shortlists for the €750m Project Charlie portfolio, which is comprised of German and French property loans, and the circa €500m Project Bravo Scandinavian loan portfolio.

CoStar News understands that Blackstone, Cerberus, Deutsche Bank and Lone Star have each made the second round shortlists for both projects Charlie and Bravo, while Apollo and Colony Capital is through to one of the two.

Projects Charlie and Bravo, therefore, could still either trade separately or together.

Lloyds has requested financing term sheets from the major investment banks to provide loan-on-loan financing for the winner or winners of projects Charlie and Bravo.

BAML, Nomura, JPMorgan, Citigroup and Goldman Sachs have been approached to provide financing, with common metrics of a three-year loan at a 60% loan-to-cost (LTC), priced at near 400 basis points over three-month LIBOR.

CoStar News understands, BAML’s lending terms is among the most competitive at this stage.

Second round bids are due in on 22 November.

Project Hampton’s pricing is thought to be shallow in discount than first envisaged.

For more background on the composition of Project Hampton, and the first round stage process, please click here. Deloitte is selling Project Hampton for Lloyds.

Next week, KPMG will bring to market the much-anticipated €7.8bn Project Rock portfolio, the predominantly UK-focused IBRC property loan portfolio comprised of legacy Anglo Irish Bank pre-crisis loans.

Project Rock is widely-thought to be the only one of the four IBRC loan portfolios – with the others projects Evergreen, Sand and Stone – which is certain to trade, with Michael Noonan, Ireland’s Minister for Finance, mandated discount rate of 4.5% still potentially scuppering other private market trades.

The €7.8bn Project Rock portfolio is comprised of €6.1bn UK property loans, around €930m in German loans and the balance, or just under €550m in UK loans.

KPMG, which is selling Project Rock itself, is expected to accept bids on complete and piecemeal basis.

All parties declined to comment.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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