KPMG has repackaged all €2.4bn unsold IBRC predominantly non-performing loans (NPL) in three separate portfolios, dubbed projects Amber, Quartz and Pearl, in a set of fresh blind auction processes which are targeted for staggered closures before the year end.
The re-issued NPLs are comprised of the following unsold loans from previous loan sale processes:
- €400m of Project Evergreen loans, the corporate loan book;
- €1.4bn of Project Stone loans, including predominantly standalone tranches; and
- €648m of Project Sand loans, the Irish residential mortgage book.
PricewaterhouseCoopers has once again been assigned to advise KPMG’s Kieran Wallace and Eamonn Richardson, the joint special liquidator of IBRC, on the re-attempted sale of the loans which failed to meet the minimum price threshold as set by Ireland’s Minster of Finance, Michael Noonan in May last year.
The re-packaged predominantly NPLs are now comprised as follows:
- the €675m Project Amber, comprised of Irish corporate and commercial property loans;
- the €1.1bn Project Quartz, comprised of commercial property loans; and
- the €655m Project Pearl, comprised of predominantly Irish residential mortgages.
Project Amber is the first of the three re-issued NPLs to be markets, with the sales process having started last week, according to the Irish Independent. The sales process for Projects Quartz and Pearl are expected to begin next month.
Binding bids for Amber are expected by October, with November and December pencilled in for Quartz and Pearl, the Irish Independent also reported.
A successful sale of projects Amber, Quartz and Pearl would facilitate the completion of IBRC’s accelerated wind-up, as decreed by Ireland’s parliament in early February 2013 after emergency overnight legislation was passed in the Dáil, Ireland’s parliament, and KPMG’s Wallace and Richardson replaced IBRC’s Board.
The winners of the bulk of the IBRC loan portfolios to date are as follows:
- Lone Star has won the entire two-tranche Project Salt and 12 of the 14-tranche Project Rock legacy IBRC commercial property loan books with a combined face value of just over £5.2bn for a discount to gross unpaid balance of circa 33%. Citigroup, Wells Fargo and Royal Bank of Canada financed the deal with each bank committing one-third of a £2bn loan. (See story here).
- Sankaty Advisors and Canyon Capital Advisors acquired the remaining two tranches of Project Rock.
- Project Stone was sold as follows (see story here):
- CarVal Investors won tranche 8 on its own.
- Northwood Investors won the €281m tranche 16 of Project Stone
- Deutsche Bank won tranches 6 and 7, the two largest tranches by nominal balance and highest quality of assets within Project Stone (face value: €1.66bn);
- CarVal Investors and Goldman Sachs Special Situations Fund, alongside minority equity partner Pepper Asset Services, won tranches 1, 2 and 4 (face value: €3.2bn) ;
- Lone Star won tranches 3 and 5 (face value: €1.97bn), in addition to a small number of loans originally within tranche 7;
- Colony Capital and Patrick McKillen won the €800m Project Pebble IBRC loan portfolio. (See story here)
- 64% of the €1.8bn, or €1.15bn of Project Sand has been sold to Lone Star and Oaktree Capital Management. (See story here)
In total, more than around 90% of IBRC’s €21.7bn loans were sold within 14 months of the bank’s liquidation.
KPMG’s progress report to Ireland’s Department of Finance discloses that over the 14 months from 7 February 2013, when the firm was mandated as liquidator, to 31 March 2014, KPMG’s total fees stood at €48.4m.
In addition, a further €10.8m in fees has been accumulated to legal advisers, including Arthur Cox, Byrne Wallace and Maples and Calder, while another €14.9m of fees is owed to additional professional advisers, with the bulk to PwC and the roster of valuation firms.
Deloitte, Eastdil Secured and Merrills also earned just under €1.7m between them.
The progress report, dated 6 June 2014, also reveals a number of aggregate stats, including:
- 52 loan sales processes conducted;
- Loans consisted of more than 15,000 different borrower groups;
- Underlying collateral was based in 22 different jurisdictions;
- 345 interested parties from 13 countries, leading to 201 bids across six portfolios (Evergreen, Rock, Salt, Sand, Stone and Pebble);
- Initially, 134 indicative bids which led to 57 binding bids.