Bank of Ireland (Gov & Co) (IRE, BKIR.L) Monday said it has agreed to sell another 0.59 billion euros worth of Project Finance loans to entities within Sumitomo Mitsui Banking Corp., a subsidiary of Sumitomo Mitsui Financial Group Inc.(SMFG).
The bank said cash proceeds from the recent transaction of around 0.47 billion euros (before transaction and related costs) will be used to further reduce its funding from monetary authorities in accordance with its deleveraging plan. No impact is anticipated on the company's core Tier 1 ratio.
The consideration is estimated to be around 85 percent of the total loan commitment or about 84 percent of the amount drawn.
The loans relate to a portfolio of infrastructure and energy assets across North America and Europe, the company said.
It was on October 14 that the company announced divestments of non-core loan portfolio of about 5 billion euros, including the sale of Project Finance loans of nearly 0.67 billion euros for a price of about 92 percent of commitments.
Both these transactions, combined with other agreed or completed sales and deleveraging initiatives within the Project Finance portfolio, will total around 1.55 billion euros in the year, at an average price of about 90 percent of commitments.
Last month end, real estate investment and services firm Kennedy Wilson Holdings Inc. (KW) agreed to buy, jointly with its institutional partners, a loan portfolio from the bank for $1.8 billion. The first phase of $1.4 billion portfolio purchase was closed on October 21 and the additional $400 million will be closed by the end of November.
In June this year, Kennedy Wilson had acquired Bank of Ireland Real Estate Investment Management, a business that represents about $2.3 billion of assets under management.
On July 25, the Irish Government reached an agreement with a group of institutional investors and fund managers to sell about 14 percent stake in Bank of Ireland for up to 1.123 billion euros, helping the bank avert a possible nationalization.
Bank of Ireland said today it continues to make good progress in sales processes in respect of other non-core loan portfolios.
IRE closed Friday's regular trading at $4 on the NYSE.
BKIR.L is currently trading at 0.08 pence, up 5.13 percent, on a volume of 4.37 million shares on the LSE.
by RTT Staff Writer
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