Irish Bad Bank to Buy RBS Loans to Largest Irish Mall

Ireland’s state-owned bad bank agreed to buy Royal Bank of Scotland Group Plc and KBC Groep NV (KBC) loans to Ireland’s largest shopping mall, its first purchase of debt that didn’t belong to the country’s bailed-out lenders, people familiar with the matter said.

The National Asset Management Agency’s purchase of RBS unit Ulster Bank and KBC’s combined 30 percent stake of a syndicated loan to the Dundrum Town Centre, a 150,000 square- meter (1.6 million square-foot) mall in south Dublin, gives it full control of the debt, said the people, who asked not to be identified because the talks are private.

“This appears to be a sensible move by NAMA as it gives the agency control of loans linked to what is the jewel in the crown of Irish retail,” said Philip O’Sullivan, an economist at Investec Plc in Dublin.

The agency, which owns the rest of the mall’s debt, is paying par value for the loans, one of the people said, declining to give a figure for the loans. NAMA’s move may pave the way for the sale of the mall, valued at as much as 1 billion euros ($1.4 billion), to help repay the project’s developer Castlethorn Construction’s loans to the agency, the people said. Officials from NAMA, RBS and KBC declined to comment.

NAMA was created by the nation’s previous government in 2009 to take on and sell toxic mortgages purged from domestic Irish banks, including loans extended to help finance the development of the mall by the former Anglo Irish Bank Corp. The purchase of the remaining Dundrum loans is the first time the agency has moved to take over debt from non-Irish banks.

Bad Bank

Ulster Bank is winding down 9 billion pounds ($14.9 billion) of mainly commercial real estate assets that the lender has placed in an internal bad bank.

Separately, NAMA said today it agreed to sell real estate loans with a face value of 4.5 billion pounds to affiliates of private-equity firm Cerberus Capital Management LP. The sale of the Project Eagle portfolio is NAMA’s biggest deal since it was created in 2009, the bad bank and New York-based Cerberus said in a statement today without disclosing the price.

To contact the reporters on this story: Neil Callanan in London at ncallanan@bloomberg.net; Joe Brennan in Dublin at jbrennan29@bloomberg.net

To contact the editors responsible for this story: Andrew Blackman at ablackman@bloomberg.net; Heather Harris at hharris5@bloomberg.net Dara Doyle

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