NAMA has completed the sale of the Northern Ireland real estate loan book to Cerberus, dubbed Project Eagle, on Friday afternoon, crystallising around a £160m loss for Ireland’s bad bank.
Cerberus beat PIMCO back in April to win Project Eagle, which comprises all NAMA’s Northern Ireland borrowers’ domestic and overseas property and development loans, paying approximately £1.2bn for the loan book which had a £4.4bn nominal balance, reflecting a 72.7% discount.
The price paid by Cerberus crystallises an approximate £320m loss on the price originally paid by NAMA when the loans were piecemeal acquired during the global financial crisis, although this loss was mitigated to around £160m after factoring in the income derived from the loans during NAMA’s period of ownership.
Cerberus financed its £1.2bn Project Eagle purchase with an approximate £780m loan-on-loan facility Nomura and BAWAG, reflecting a 65% loan-to-cost (LTC).
CoStar News understands that the loan-on-loan facility was priced at circa 375 basis points over three-month LIBOR.
The majority of the finance has been provided by Normura, in its second such financing for Cerberus after a £189m facility in May 2013 for Cerberus’ Project Thames, the UK non-performing loan portfolio acquired from Lloyds.
This is the first loan-on-loan facility for Bawag, the Austrian lender which is still majority-owned by Cerberus, which has a lending appetite for deals around the mid 300 to early 400 basis points range.
Project Eagle is secured by approximately 850 properties across Northern Ireland, the rest of the UK and the Republic of Ireland with all borrowers originating from Northern Ireland.
Lazards managed the sale of Project Eagle on NAMA’s behalf.