UPDATE 2-Ireland's "bad bank" sells Northern Ireland loans

Fri Apr 4, 2014 8:52am EDT

* Sale exceeds 1.3 bln pounds minimum price-source

* Bought by private equity group Cerberus Capital

* NAMA speeds up sales ahead of potential quicker wind down (Adds source on price, NAMA quotes and details)

By Padraic Halpin

DUBLIN, April 4 (Reuters) - Ireland's "bad bank" sold its entire portfolio of loans belonging to Northern Ireland-based debtors on Friday in its largest deal to date, cashing in on surging international demand.

The loans, which had a par value of 4.5 billion pounds ($7.5 billion), were sold to affiliates of private equity firm Cerberus Capital Management, L.P. for more than the 1.3 billion pounds minimum reserve price, a source familiar with the operation told Reuters.

The National Asset Management Agency (NAMA), which paid 1.3 billion euros ($1.8 billion) when it took over the portfolio and had clawed back 100 million euros through disposals by the end of 2012, did not disclose the terms of the transaction.

NAMA, one of the world's largest property groups, paid out 32 billion euros to purge Irish banks of risky loans worth 74 billion euros after a real estate crash wrecked the economy and pushed the country into a bailout in 2010.

Seen as a major liability to Dublin's finances until quite recently, the state-run agency is now benefiting from a surge of demand from abroad and has been asked by the government to see if can offload all its assets before a deadline of 2020.

"This transaction represents a significant achievement for NAMA. We are satisfied that the sales process will deliver the best possible result for the Irish taxpayer," it said in a statement.

The deal follows confirmation this week by liquidators to the collapsed Anglo Irish Bank that they had sold more than 90 percent of a loan book with a par value of 21.7 billion euros, a result that exceeded all initial expectations.

The liquidators' sales, which were snapped up by the likes of Lone Star and Deutsche Bank over recent weeks, also came as a boost for NAMA, which will take over the residual book. It had anticipated a far larger transfer of loans.

NORTHERN IRISH BOOST

Friday's sale was also hailed as good news for Northern Ireland. At 4.5 billion pounds, the par value of the book is equivalent to about 15 percent of the British-controlled province's economy.

The loans were also secured on some assets in the Republic of Ireland, Britain and elsewhere in Europe, NAMA said. The split between Northern Ireland and other countries was around 50/50, the source familiar with the process said.

"I believe that this deal is excellent news for the Northern Ireland economy," said the British province's first minister, Peter Robinson.

"I have made clear the danger to the local economy of leaving valuable assets undeveloped and the threat that these posed to otherwise profitable businesses."

($1 = 0.6029 British Pounds) ($1 = 0.7291 Euros) (Additional reporting by Sam Cage in Dublin and Ian Graham in Belfast; Editing by Tom Heneghan)

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