Lloyds Banking Group has put a €1.1bn (£879m) NPL portfolio up for sale in a process that book-ends its non-performing Irish residential loan deleveraging.
The bank is understood to have appointed Deloitte to advise on the process, known as Project Paris.
The granular portfolio comprises circa 3,000 loans related to a similar number of borrower connections. The majority of the book is non-performing.
Project Paris’s underlying collateral is at least 50% located in Dublin and its commuter belt and includes blocks of flats as well as family homes.
The residential mortgage book is comprised of a single tranche and as such is expected to trade to one party, with bids likely to come from private equity investors.
The sales process is in the initial phase, with first-round bids expected in early September.
One source said: “Given where the market is in respect of demand and transaction size, it makes sense to sell these loans as one tranche.”
According to Cushman & Wakefield, the average size of NPL transactions has increased from €346m in 2013 to €621m in the first half of this year.
Lloyds was one of the first European banks to start legacy commercial property deleveraging in 2011 when the NPL market was in its infancy. It has now grown to hit a record first half of more than €40.9bn of deals this year.
Although Lloyds still has a performing Irish residential book, this portfolio is likely to be one of the last comprising its non-performing Irish residential mortgages.
Last year the bank sold a £610m portfolio of non-performing Irish retail mortgage loans to Apollo Global Management for £257m, which reflected a discount of around 60%.
It has also offloaded numerous European commercial NPLs, most recently selling the £625m Project Avon, which was two-thirds commercial property.
All parties declined to comment.
bridget.o’connell@estatesgazette.com
