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Irish to Keep Chunk of Anglo Irish Loans as Wealth Funds Circle

Sept. 18 (Bloomberg) -- Ireland may be left with a “large portion” of former Anglo Irish Bank Corp.’s loans even as sovereign wealth funds, private-equity funds and banks circle the first assets for sale, said Kieran Wallace, joint liquidator of the failed lender.

The first portfolio, codenamed Project Evergreen, has a par value of 3.5 billion euros (4.7 billion), Wallace said in an interview in Dublin. Thirteen loans within the portfolio will be sold separately by the liquidators at KPMG, appointed by the government to wind up the bank. The total loan book for sale has a par value of 22 billion euros.

Anglo Irish’s implosion following a real-estate collapse five years ago pushed Ireland to the brink of bankruptcy in 2010, as its bailout cost neared 35 billion euros. Finance Minister Michael Noonan ordered the liquidation of the lender in February, and told the country’s bad bank, the National Asset Management Agency, to take over unsold loans.

“A large portion will still more than likely go to NAMA, but we’re not disappointed by the level of external interest,” Wallace said, adding the book has drawn “very significant” interest. “Given the nature of this portfolio, it certainly will be one of the more attractive to external investors.”

Indicative bids for the Evergreen loans are due by Oct. 11, said Shane McCarthy, who is helping run the sale process at KPMG.

Loan Sales

Loans to Topaz Energy Group Ltd., a Dublin-based fuel retailer, broadcaster TV3 Group and Arnotts Holdings Ltd., which runs the Ireland’s biggest department store, are earmarked to be auctioned individually, the Sunday Business Post reported on Sept. 15, without saying where it got the information.

The liquidators plan to start marketing two other loan books, 7.8 billion euros of mainly U.K. commercial real-estate assets, and 1.8 billion euros of Irish residential mortgages in the middle of next month.

Wallace said he expects “a number” of borrowers will move to buy out their loans “at par” to avoid them being sold to a third party. Ireland’s surviving banks are preparing to finance some potential loan bidders, according to Wallace, who said as many as 50 people at the accountancy firm are working on the liquidation.

“That’s a sign that there are some good businesses banked by,” the lender he said. “These are bankable propositions.”

Noonan has ordered NAMA to take over whatever loans the liquidators can’t sell by the end of the year at a reserve price being set by independent valuers.

Repaying NAMA

Noonan will have to reimburse NAMA if the entire loan book is sold for, or independently valued, at less than 12.9 billion euros. That’s how much NAMA paid the central bank this year to buy out the part of the regulator’s emergency loans to Anglo Irish, by then renamed the Irish Bank Resolution Corp. after being merged with the Irish Nationwide Building Society.

While Wallace declined to specify how much he expects to raise through loan sales, he said he’s rebuffed would-be buyers considering cents-in-the-euro offers.

“We didn’t really entertain that,” said Wallace. “We were very clear from the beginning that this is not a firesale.”

To contact the reporter on this story: Joe Brennan in Dublin at jbrennan29@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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