Private equity groups fight it out for Ireland’s ‘Project Arrow’

The battle is heating up to acquire Ireland’s biggest loan portfolio, ‘Project Arrow’, the €7.2 bn portfolio being sold by Ireland’s ‘bad bank’ NAMA.

The portfolio comprises mainly non-performing loans with a par value of more than €7.2 bn, according to those who track the market. However, due to the fact that many of the loans are non-performing, the portfolio may sell for as little as €1 bn, insiders say. Even then, the sale would still mark one of the biggest real-estate related sales in Ireland.

Goldman Sachs is believed to be bidding jointly with US specialist investor CarVal Investors. Apollo Real Estate and Cerberus are also believed to be on the shortlist, with final bids due soon, according to those who track the market. The deal is expected to close by the end of the year. A spokesman for NAMA declined to comment.

‘Project Arrow’ is secured by approximately 96% Irish real estate and 3% UK real estate. The underlying properties - of which there are 2,402 - comprise 39% residential assets, 35% commercial properties, 24% land and development and 2% hotels and leisure facilities.

Cerberus is not new to the Irish market – last year, it acquired NAMA’s Northern Irish loan book for around €1.6 bn. The portfolio had a book value of €5.7 bn. Also, in July, Lloyds Banking Group sold commercial loans in Ireland to a group of buyers including Goldman Sachs, Bank of Ireland and CarVal for about €1.2 bn.

‘Project Jewel’ is also being offloaded by NAMA, so-named because the portfolio includes the ‘crown jewel’ - the 1.3 mln square feet Dundrum Town Centre. Final bids are due in mid-September. Hines, Hammerson, Colony Capital and Allianz are expected to be among the bidders, according to market sources. Allianz declined to comment. The other companies could not be reached for comment.

NAMA is also in the process of unloading further real estate loans acquired during the financial crisis. A spokesman told PropertyEU that the bank ‘is on track this year to redeem €5.5 bn of senior debt. This will mean that 73% of senior debt will have been redeemed by the end of the year,’ he said. NAMA currently expects to repay all of its €30.2 bn senior debt in full by the end of 2018. To date, 64% has already been repaid, with a target of 80% by the end of 2016. NAMA intends to redeem its €1.6bn sub debt by March 2020, the spokesman added.