Oaktree wins NAMA’s multi-borrower Project Albion paying around £115m

Oaktree Capital Management has won NAMA’s Project Albion paying circa £115m for the bad bank’s second-ever multi-borrower loan portfolio, secured by predominantly UK commercial properties.

Screen Shot 2015-07-02 at 12.52.46The purchase price at just below £115m reflects around 51 pence in the pound for the Project Albion non-performing loan portfolio (NPL), which had an original principal balance of £226m.

CoStar News understands that underbidders including BAML, CR Investment Management and Canyon Capital Advisors. At an earlier stage in the process, Sankaty Advisors was also a bidder.

BAML was originally the preferred bidder but its final, binding offer fell below NAMA’s threshold price which saw the deal collapse and NAMA re-market the Project Albion portfolio, which led to Oaktree’s acquisition.

This is the second winner of a NAMA loan portfolio is as many days, following CoStar News exclusive story yesterday that Deutsche Bank had won NAMA’s €785m Project Maeve, paying around €97m, or 12 cents in the euro, for property developer Gerry Barrett’s loan portfolio.

CoStar News was also first to report on the launched sale of NAMA’s Project Albion back during the annual European property conference, MIPIM in March.

Project Albion, as NAMA’s second multi-borrower loan portfolio marks a departure of de-leveraging pools of loans by a sole borrower group, is comprised of 22 separate loans derived from eight separate borrowers.  

NAMA’s first-ever multi-borrower NPL was the £4.5bn Project Eagle, the bad bank’s entire Northern Irish loan book, which was acquired by Cerberus for approximately £1.2bn in April 2014, financed with a £780m loan-on-loan facility by Nomura and BAWAG.

The loans are predominantly from legacy Allied Irish Bank and are secured by 23 UK commercial properties and a further two assets in the Netherlands. All but one of the 22 loans are in default.

Assets includes the Mar Hall hotel, a five-star luxury hotel near Glasgow once owned by the Earl of Mar and frequented by celebrity guests including, among others, Bob Dylan, Beyonce, Coldplay, Oasis and Brad Pitt. The projected EBITDA for Mar Hall is around £1.2m for 2015.

Project Albion also includes seven offices, a leisure asset, one stabilised industrial estate in Scotland, five residential investment properties in regional cities and more than 300-acres of land across 10 separate sites.

A number of the land sites are thought to be problematic and will require capital investment to make the sites suitable for development. 

Project Albion, which is the oldest historic name for the British isles, has a gross annual rental income of around £6.5m and a weighted average unexpired lease term of around three years. 

Cushman & Wakefield’s Corporate Finance team in London has been mandated to sell Project Albion on behalf of NAMA.

NAMA, Oaktree and Cushman & Wakefield all declined to comment.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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