Bloomberg News

Irish Life Said to Seek Bids for 500 Million-Euro Subprime Loans

October 10, 2011

Oct. 10 (Bloomberg) -- Irish Life & Permanent Plc is seeking to sell its 500 million-euro ($680 million) subprime mortgage book after being ordered by regulators to shrink its loans, according to two people with knowledge of the matter.

The Dublin-based company, the fifth Irish lender to fall under state control, wants first-round bids for Springboard Mortgages by the end of this week, according to one of the people, who declined to be identified, as the sale isn’t public.

The government has injected 2.7 billion euros into Irish Life, which is being split up. The company, which is selling various loan books to lower its loan-to-deposit ratio, is also looking for a buyer for its life assurance unit.

Irish Life established Springboard with Merrill Lynch & Co. Inc. in January 2007 to sell mortgages to what it called “near prime” customers without long credit histories or who had irregular income sources. Irish Life bought out Merrill Lynch in June 2008 and the unit stopped writing loans 12 months later.

The group has also hired KPMG LLP to advise on the disposal of its 6.8 billion-pound ($10.6 billion) U.K. residential mortgage book as it seeks to cut its loan-to-deposit ratio from 227 percent at the of June to a central bank target of 122.5 percent by 2014.

Irish Life spokesman Ray Gordon declined to comment on the group’s plans to sell Springboard.

--Editors: Dara Doyle, Steve Bailey

To contact the reporter on this story: Joe Brennan in Dublin at jbrennan29@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net


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