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IBRC Said to Sell Debt in Dublin Hotel Host to Obamas

Irish Bank Resolution Corp. and Bank of Ireland (BKIR) will sell debts tied to the Shelbourne Hotel in Dublin to Kennedy-Wilson Holdings Inc. (KW), according to two people with knowledge of the matter.

IBRC and Bank of Ireland will sell the loans to Kennedy-Wilson on Jan. 17, said one of the people, who requested anonymity because the deal is private. The Beverly Hills, California-based investment firm said last week that it was under contract to pay about about $152 million for the “potential purchase” of loans secured against the Shelbourne, where U.S. first lady Michelle Obama and her daughters stayed during their visit to Dublin last year.

“We anticipate financing this acquisition with approximately 50 percent debt and potentially in part with third party equity,” Kennedy-Wilson said in the Jan. 6 filing, without disclosing the sellers.

Irish commercial real estate sales were the highest last year since 2006 as investors including billionaires John Malone sought out deals, according to Jones Lang LaSalle Inc. Irish commercial property values fell by as much as two-thirds after a real estate bubble burst in 2008.

In an e-mail response to questions, Bank of Ireland declined to comment on the sale of the loans. Spokesmen for IBRC and Kennedy Wilson declined to comment.

The Shelbourne has hosted some of the world’s most influential people since its 19th century opening. John Wayne, Charlie Chaplin and John F. Kennedy took rooms there on visits to Dublin while Bill Clinton and Julia Roberts are among more recent guests, according to a hotel video. In 1922, former rebels drew up the Irish constitution in room 112 of the hotel.

Irish Developers

Bank of Ireland and IBRC’s predecessor, Anglo Irish Bank Corp., combined to lend more than 200 million euros ($273 million) to a group of Irish developers to buy and refurbish the Shelbourne in 2004, CoStar Finance reported last month.

Shelbourne Hotel Holdings Ltd., which owns the property, valued the hotel at 86.5 million euros at the end of 2011, compared with 246 million euros in 2007, according to filings with the Irish companies registration office. The firm had total debts of 289 million euros, the filings show.

The Shelbourne Hotel is based on St. Stephen’s Green in Dublin’s city center and has been in business since 1824, according to its website. The first owner named the property for William Petty, the Earl of Shelburne, an 18th century U.K. prime minister who was born in the Irish capital.

To contact the reporters on this story: Donal Griffin in Dublin at dgriffin10@bloomberg.net; Neil Callanan in London at ncallanan@bloomberg.net

To contact the editors responsible for this story: Dara Doyle at ddoyle1@bloomberg.net; Douglas Lytle at dlytle@bloomberg.net

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