CERBERUS COMPLETE ON PROJECT OYSTER
Over the last two years huge portfolios of loans have been sold by Irish banks to predominantly American Private Equity firms. Ulster Bank have been leading the charge with this policy, and have sold more than £15BN of all kinds of loans to CERBERUS CAPITAL MANAGEMENT – A New York based private equity fund who specialize in this area.
In the last two weeks we have been advised that the most recent portfolio sale “Project Oyster” has finally completed, and borrowers are now receiving letters from Capita Asset Services, who are employed by the fund to engage with their new customers on their behalf. This particular portfolio comprises all kinds of loans from home mortgages, to farm loans to unsecured positions that relate to a range of businesses including personal loans.
Selling loans is a great way for a bank to clean up their balance sheet and certainly from Ulster Banks point of view, they have for the most part now dealt with the majority of their legacy bad debt positions using this particular policy.
What now for the borrower
This process will see the new owner of the loans ask for full repayment of the debt within a very short period of time. Private equity funds are not banks and their only allegiance is to their investors in the USA. Therein lies the problem. The challenge here being that with the liquidity problem in our market place, it is going to be very difficult for the borrowers to refinance their loans at this time. The result of this will be that many of the assets and businesses within this portfolio will likely have to be sold resulting in many of the borrowers losing what they have been working for and towards for many years. Ten years post the property crash we are still seeing the out workings of what happened, and if you are unfortunate enough to be involved in this loan sale, you need to very quickly get a plan of action together to present to your new creditor.
It is highly likely that over the past few years you have been frustrated In your attempts to settle with the bank and in many ways feel let down by the bank as I’m sure when you started the relationship, you never thought the day would come that they would sell your facility for pence in the pound to a vulture fund.
The harsh reality is that over the next few weeks, more letters will arrive at your front door looking for repayment proposals, and my advice is to engage with the funds and put your best foot forward in an attempt to hold onto what you have.
In the last twelve months our team has been involved in over £150MM of refinancing deals involving private equity companies and are well placed to help you in this regard.
If your loan has been sold, now is the time for action. Get in touch with us today and very quickly we can assist you in this regard.
Conor Devine MRICS