Anglo Irish Bank, Ireland's third largest institution, is packaging up for sale on the international markets €3bn worth of loans to Irish property developers, shopping centre owners and retailers in an attempt to raise funds as the Irish banking sector continues to languish.
The bank is seeking to sell on the loans, 40% of which were generated in Dublin, to international buyers in its first securitisation transaction since the government's €480bn guarantee scheme was announced.
If subscribers for the loans can be signed up it will give the embattled bank fresh liquidity as it tries to shirk off concerns over its credit profile. On Friday Moody's said it may downgrade the bank's long term deposit rating.
Anglo's share price is down over 80% this year amid concern over rising bad debts and liquidity challenges. Moody's said on Friday there was concern about the rapid deterioration in the economic environment in Ireland and the UK and this left Anglo vulnerable to increasing bad debt provisions.
Anglo is packaging up 71 commercial mortgages issued by the bank on 114 properties in Ireland and the UK. Of the loans 57% are on office buildings, 22% are on shopping malls and 12% are on individual retail premises, with the remainder relating to warehouses Anglo has lent to.
The huge loan deal comes in two tranches, a €2.26bn senior tranche rated A1 by Moody's and a €756 million subordinated tranche, which is unrated. Anglo is issuing the loans through a company called Proodos. The loans were originally granted in 2006 and 2007 by Anglo Irish. Anglo is hoping the investment grade credentials of the tenants will make the transaction appealing to investors.
» Meanwhile AIB sources have denied reports which circulated last week in Dublin suggesting that Anglo approached AIB about a potential link up in recent weeks.