Ulster Bank has added an extra €4bn (£3.2bn) of loans to Project Aran, taking it to a mammoth €6bn.
The bank’s third Irish non-performing real estate loan portfolio now comprises loans backed by up to 6,000 underlying properties.
More than 75% of the collateral is based in the Republic of Ireland, with 20% in Northern Ireland and a fraction in the UK.
The enlarged portfolio comprises all asset classes from hotels, development land, farmland, flats, office, retail space and industrial.
Project Aran originally included more than 1,150 flats, 1.1m sq ft of office and retail space, 1.1m sq ft of industrial and 1,550 acres of land.
A shortlist of three to progress to the second round has already been selected for Project Aran, which had a face value of €1.7bn when it first came to market in September.
It comprises Cerberus, Lone Star and a Pepper Asset Servicing-led consortium including CarVal Investors, Goldman Sachs’s special situations
fund and Apollo Global Management.
It is unusual for a loan book to be increased in size – and by such a substantial amount – during the sales process, but bidders were expecting the increase and had been given a rough guide as to quantum.
The original timetable is expected to stay in place despite Project Aran’s increased size.
Final binding bids are due in early December, with a single winner expected to be picked for a closure before the year-end.
Although this “supersizing” of Project Aran represents a chunky clear-out of the bank’s real estate loans, it is not expected to be the last portfolio that the lender will put up
for sale.
Ulster Bank’s Irish and UK real estate exposure now forms part of RBS’s bad bank, RBS Capital Resolution.
RCR’s total gross commercial real estate exposure was £18.3bn, according to its half-year results to the end of June.
Eastdil Secured is advising on the sale. All parties declined to comment.
bridget.o’connell@estatesgazette.com
