Bloomberg News

Private-Equity Groups Said to Vie for Anglo Irish Loans

July 14, 2011

(Updates with Colony Capital interest in ninth paragraph.)

July 14 (Bloomberg) -- Four private-equity firms are leading investor groups seeking to buy Anglo Irish Bank Corp.’s $9.65 billion of U.S. property loans, according to two people with knowledge of the sale process.

Centerbridge Capital Partners LLC is teaming with American International Group Inc., Paulson & Co. and BlackRock Inc. to make a bid, while Blackstone Group LP is working with Deutsche Bank AG, said the people, who asked not to be named because the process is private. TPG Capital is pairing with LoanCore Capital LLC, while KKR & Co. is with Westbrook Partners LLC, the people said. The groups may ultimately opt not to submit offers and coalitions may change before bids are due Aug. 9, they said.

The firms are weighing offers for the entire portfolio of 248 loans, tied to buildings from Manhattan to Beverly Hills, California, and may sell them in pieces to property owners or other private-equity companies after the purchase, the people said. The competition underscores the appetite for real estate by buyout firms that are pushing deeper into acquisitions at the expense of smaller companies seeking deals.

“These consortia may be leading this process because they have sufficient firepower and expertise to take down the whole portfolio,” said Ben Thypin, director of market analysis for Real Capital Analytics Inc. in New York. “A winning consortium is likely to retain some of the assets and quickly flip the rest to smaller firms that were unable to compete in the auction.”

Sale at Discount

Anglo Irish, based in Dublin, is seeking to unload the assets after being nationalized two years ago. Bids are likely to value the loans at a discount to face value, the people with knowledge of the process said.

Representatives of Centerbridge, Blackstone, TPG and KKR declined to comment. Officials for their partners either didn’t comment or didn’t return messages.

A message left at Anglo Irish’s U.S. office in Boston after regular business hours wasn’t immediately returned.

Eastdil Secured LLC and FTI Consulting Inc. are advising Anglo Irish on the sale, the people said. The portfolio has been divided into eight pools, with the largest consisting of $2.26 billion (1.58 billion euros) of distressed office and industrial loans, according to an offering document from Eastdil.

Colony Considers Offer

Colony Capital LLC, the private-equity and real estate investment firm run by Thomas Barrack, is weighing a bid for the portion of loans that are considered sub-performing and non- performing, according to a person familiar with the deal. That comprises roughly half the total Anglo-Irish U.S. portfolio, or about $5 billion worth of loans. A Colony spokesman declined to comment.

Potential buyers may bid on the entire portfolio or on specific pools, according to the document. Bids will not be accepted on individual loans, which are backed by such properties such as the Two Rodeo Drive shopping center in Beverly Hills and the Apthorp apartment complex in New York, according to the document.

“The offering presents investors with a one-of-a-kind opportunity to access a diversified portfolio secured by a distinct combination of quality assets,” the document said.

--With assistance from Noah Buhayar in New York. Editors: Kara Wetzel, Larry Edelman

To contact the reporters on this story: Jonathan Keehner in New York at jkeehner@bloomberg.net; Jason Kelly in New York at jkelly14@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; Christian Baumgaertel at cbaumgaertel@bloomberg.net


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