Cerberus Capital Management and Pimco are through to the second round in National Australia Bank’s £674m Project Chestnut loan sale process.
The process pits the two investors, who went head to head for Nama’s entire Northern Irish loan portfolio in the £4.5bn Project Eagle sale earlier this year, against each other again.
The investors, part of a ?four-strong shortlist also thought to include Apollo Global Management, all now have access to the second-round data room and are preparing final bids, which are due before the end of July.
It is understood that Kennedy Wilson and Lone Star – which have been prolific non-performing debt investors – did not table bids for the granular two-tranche UK loan portfolio.
Project Chestnut comprises loans originated through ?NAB’s UK banking subsidiaries, Clydesdale and Yorkshire banks.
It is split into two pools. The first comprises around 120 loans with a face value of £442m that are secured against 255 commercial properties and 490 residential assets – or 35.7% of the pool – and linked to 71 borrowers.
The loans are either already in default, passed maturity or near maturity, and more than £300m of the loans are less than £20m each.
The second £232m pool includes 309 small business loans secured by 1,448 residential properties and 157 commercial properties.
The Nama sale had been prompted by an off-market approach by the world’s largest bond investor. However, Pimco was pipped by Cerberus when the deal for 850 properties completed in June.
Morgan Stanley is advising on the sale.
bridget.o’connell@estatesgazette.com
