Cerberus Capital Management has won the final tranche of Ulster Bank’s Project Finn, paying £225m for the Irish residential mortgage pool, comprised of around 2,000 separate borrowers, completing the three-tranche sale to separate winners in the last 48 hours.
This morning, RBS confirmed that Deutsche Bank and Apollo Global Management won the largest tranche – the CRE loan tranche – for £400m.
Separately, Sankaty Advisors has agreed to acquire the third – and smallest tranche – comprised of around €300m of SME loans in Ireland, CoStar News understands. This tranche was comprised of loans extended to operating companies which own retail units, car parks and nursing homes with Sankaty paying around €100m to €120m.
The gross unpaid balance on the residential mortgage pool was £549m, implying a net discount on gross liabilities of 59%. RBS said the carrying value of the loans, after provisions taken, was £223m, and the loans generated a loss of £17m in the year to 31 December 2014. RBS is expected to claw back around £1m in provisions booked after transactions costs.
All three tranches are expected to close in September.
CarVal Investors and Goldman Sachs joint bid was also an underbidder. Cerberus pitched for all three tranches, as did Deutsche Bank and Apollo, while Sankaty only bid on the smaller SME tranche.
The three separate trades to Apollo and Deustche Bank, Cerberus and Sanktay Advisors potentially has implications for two large upcoming Irish NPLs of similar collateral compositions – Lloyds’s €4.2bn Project Poseidon and NAMA’s €7.2bn Project Arrow – as reported earlier this morning.
KPMG advised RBS on the sale of Project Finn.