Goldman Sachs to sell Irish non-performing loans attached to 1,000 properties

Wall Street banking giant Goldman Sachs is currently seeking to sell a portfolio non-performing Irish mortgages attached to 1,000 properties, taking advantage of a window in the market ahead of expected problem-loan sales by banks this year, according to sources.

The portfolio, known as Project Toucan, amounts to 1,800 loans in total, they said, meaning many properties carry more than one mortgage. It is believed that the loans relate to both buy-to-let and owner occupier properties and stem from various portfolio purchases that the US investment bank was involved in over the past decade.

The sources declined to give the original value of the loans, which would have amounted to hundreds of millions of euro, or the price at which they are expected to trade. A spokesman for Goldman Sachs declined to comment.

Goldman Sachs was involved in the acquisition of Irish mortgages from groups such as Lloyds Banking Group, GE Capital, AIB and KBC Bank Ireland in the past decade, sometimes as part of a consortium of buyers.

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Final bids

Final bids were called last week, with Goldman Sachs taking advantage of an opportunity to market the loans in what is expected to be a busy year for non-performing loan sales across Irish banks as they seek to shed legacy long-standing arrears cases as the sector faces a spike in Covid-related defaults.

AIB agreed last month to sell a portfolio of 4,000 deep-in-arrears mortgages to US investment group Apollo for a discounted price of €400 million, with Mars Capital Finance Ireland contracted to service the loans.

The total original value of the loans in the portfolio, known as Project Oak, was about € 1 billion.

Bank of Ireland said in early March that it aims to sell a portfolio of non-performing mortgages this year. The bank had postponed a planned sale of a batch of problem mortgages last year – which was to be carried out by a way of a bond market refinancing, or securitisation– as it focused on the evolving coronavirus crisis.

KBC Bank Ireland has also signalled it may sell long-standing problem owner-occupier mortgages to avoid being forced by regulators to set aside more expensive capital against these loans.

Davy analysts said in a report on Tuesday that Permanent TSB (PTSB) may sell more non-performing loans, which tie up high levels of expensive capital, to free up reserves to support the planned purchase of performing mortgages and small business loans from Ulster Bank.

Capital support

Deutsche Bank analysts estimated last week that PTSB would need about €550 million additional capital support an acquisition would eclipse its own €490 million market value, with the money coming “ideally” from both the Government and private investors.

Ulster Bank's parent, NatWest, confirmed on February 19th that it was winding down Ulster Bank in the Republic over a number of years, as it had become increasingly hard to generate sustainable returns from the market. Ulster Bank, which is also in talks to sell corporate and small-business loans to AIB, will also have to consider options for its own €1.5 billion of non-performing loans.