Lloyds confirms Project Lane sale to Apollo at 89.8% discount

Lloyds Banking Group confirms the sale of the circa €1.8bn Project Lane Irish non-performing loan portfolio to Apollo Global Management, as revealed by CoStar News last Friday.

In a statement to the Stock Exchange, Lloyds confirmed this lunchtime that it has agreed the sale of a portfolio of Irish commercial real estate loans to Risali Limited, an entity affiliated with Apollo Global Management, for a cash consideration of £149m.

The Irish Project Lane portfolio had an outstanding value of £1.46bn in sterling terms, which means the £149m paid reflects an 89.8% discount – consistent with the 90% discount and the €180m price paid figure revealed by CoStar News on Friday.

Project Lane generated losses of £202m in the year to 31 December 2011.

Lloyds said in a statement: “The transaction is not expected to have a material impact on the group due to the significant impairment provisions held against the portfolio, which are higher than the average across the Irish wholesale book because of the particularly distressed nature of these assets. The sale proceeds will be used for general corporate purposes.”

This transaction is in line with the group’s strategy of de-risking its balance sheet and reducing its non-core assets, added the statement.

The transaction is expected to complete in the first quarter of 2013.

CoStar News also revealed that Apollo bid across the composite circa €2.2bn Project Pittlane portfolio, but was outbid by an isolated bid from CarVal Investors on the circa €350m Project Pittsburgh sub portfolio.

Apollo beat competition from Lone Star, which bid purely for the Lane portfolio, while CarVal Investors beat competition from Marathon, which bid just for the Pittsburgh component.

A four-strong consortium comprised of Kennedy Wilson, Deutsche Bank, Och-Ziff and Varde Partners also bid across the whole Pittlane portfolio.

Project Pittlane is comprised of as many as 700 individual loans, lent by Bank of Scotland in the middle of the last decade to Irish property companies and entrepreneurs.

There is understood to be around 500 properties securing the loans, which also include capex facilities and junior loans, from around 50 different borrowers.

Deloitte has managed the sale of Project Pittlane on behalf of Lloyds, which was brought the Irish NPL to market at the end of August, after selling the much smaller €360m Project Prince NPL portfolio to a joint bid by Kennedy Wilson and Deutsche Bank, which paid around €61m reflecting an 83% blended discount, which CoStar News was first to reveal.

jwallace@costar.co.uk

About James Wallace

Finance Editor, CoStar News
Gallery | This entry was posted in Banks, Lenders, Market Trends, Private equity real estate and tagged , , . Bookmark the permalink.

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