Cerberus closes €5.6b NAMA loan portfolio buy

US investment firm Cerberus Capital Management has completed the acquisition of the £4.5 bn (€5.6 bn) Eagle loan portfolio from Ireland's bad bank National Asset Management Agency (NAMA).

Cerberus is paying £1.3 bn for the assets, reflecting a 70% discount to face value.

The deal is NAMA's single largest transaction since it was set up to take on toxic assets from the Republic's main banks. The sale relates to loans secured on assets in Northern Ireland and in other locations including Great Britain and Europe, where the underlying properties are owned by Northern Ireland-based debtors.

NAMA, which was advised by law firm Lazard on the deal, had previously revealed that it paid around £1.1 bn for the loans.

Cerberus, a New York-based investment firm specialising in distressed debt which manages around $25 bn in capital, said the deal will be an important foundation for its overall European strategy. In early June, the US hedge fund also bought a sub-performing UK property loanbook known as Project Avon from state-backed Lloyds Banking Group for £352 mln (€434 mln), representing a 34% discount to its gross value.

'Cerberus is a patient, long-term investor and has a well-established track record of making significant improvements to the assets that it manages. We believe Cerberus has the ideal base of expertise and experience to manage the Eagle portfolio,' commented John W Snow, chairman of Cerberus Capital Management.

This is the second multi-billion loan portfolio to change hands in Europe in the recent past. In late May, JP Morgan and Lone Star emerged as the buyer of a €4.4 bn Spanish commercial property loan portfolio being sold by German lender Commerzbank.

The book, which consists of roughly half of performing and non-performing loans, was sold for a total of €3.5 bn, with Lone Star paying €1.5 bn for the NPL book and JP Morgan €2 bn for the performing part, according to those who track the market.

The sale, codenamed Project Octopus, reflected a blended discount of 20%.

According to market sources, the loan portfolio contains some of the best quality assets to come to market in the recent past. It includes some 200 credit facilities, including loans backed by around 40 shopping centres owned by companies such as Unibail Rodamco, Robert de Balkany’s LSGI Group, Testa, and Doughty Hanson.