JPMorgan, Wells Said to Make Final Bids for Anglo Irish Loans

JPMorgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC) are among banks that made final bids to buy portions of Anglo Irish Bank Corp.’s $9.65 billion of U.S. property loans, according to three people with knowledge of the sales.

The lenders are looking to acquire pieces of the $4.52 billion of performing loans the Dublin-based bank is shedding, said the people, who asked not to be identified because the talks are private. Investor groups led by private-equity firms Blackstone Group LP (BX), working with Deutsche Bank AG (DBK), and Lone Star Funds also submitted offers for parts of the portfolio, which include $5.13 billion of subperforming and non-performing debt, the people said.

“Banks like Wells and JPMorgan can afford to pay more than a nonbank for the performing loans,” said Ben Thypin, director of market analysis for Real Capital Analytics Inc., a property- research firm in New York. “Private-equity firms like Blackstone and Lone Star can bid aggressively on the nonperforming pieces because they have a large workout infrastructure in place.”

Anglo Irish is seeking to unload loans after being seized by the Irish government in January 2009 amid a surge in souring debt. The offering includes loans backed buildings from Manhattan to Beverly Hills, California. The competition underscores the appetite for real estate loans by private-equity firms and banks looking to grow their assets even amid signs that the global economic recovery is stalling.

Martha Kavanagh, a spokeswoman for Anglo Irish, declined to comment on the bids, as did spokesmen for New York-based JPMorgan and Wells Fargo.

Board to Discuss

Final bids were submitted this week and a winner is expected to be chosen by early next week, according to the people. Anglo Irish’s board of directors is likely to discuss the final bids at a meeting today in advance of tomorrow’s release of first-half results, according to a person familiar with the matter, who asked not be identified because the information is private.

JPMorgan and Wells Fargo may hold the loans for their own books or package them for sale as bonds if investor demand for commercial-mortgage backed securities, or CMBS, is sufficient, said one of the people. Earlier this year, Wells Fargo bought a $1.4 billion portfolio of 25 loans from Bank of Ireland Plc on properties in Boston, New York and Washington, according to Alan Elias, a spokesman for the San Francisco-based bank. The lender also bought part of Allied Irish Banks LLC’s $1 billion loan portfolio, Elias said. Blackstone purchased the other piece.

Financing Possible

JPMorgan and Wells Fargo may finance the purchase of the some pools, the people said. A syndicate of lenders including Bank of America Corp., RBC Capital Markets, Citigroup Inc. and Macquarie Bank Ltd. are also vying for the assignment, the people said.

Eastdil Secured LLC and FTI Consulting Inc. (FCN) are advising Anglo Irish on the sale, the people said. The portfolio has been divided into eight pools, according to an offering document from Eastdil.

Representatives of Blackstone, Lone Star, Deutsche Bank, Citigroup, Bank of America, RBC Capital and Macquarie declined to comment on the deal. Calls to Eastdil weren’t returned.

To contact the reporters on this story: Jonathan Keehner in New York at jkeehner@bloomberg.net; Sarah Mulholland in New York at smulholland3@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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