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Archive for April 11th, 2012

In fairness to the Irish Independent, there was a reference to the payment of €1.5bn to AIB bondholders today, appended to a news report which focussed on the NTMA selling bonds to pension funds; the Irish Independent wrote “Meanwhile, nationalised AIB will pay back €1.5bn in senior, unsecured bonds later today, in the latest controversial payment to bondholders in a bailed-out bank. The debt was not covered by a specific government guarantee, though it benefited from the Government’s decision not to “burn” senior bondholders in the State-controlled banks. Last night, the bonds were trading at face value; they have seen a sustained rise in prices as the repayment date approached. (Additional reporting Bloomberg)”

And that was it in Ireland’s old media.

RTE even managed to display its ignorance when it reported in the late afternoon, the occupation of the AIB building in Dublin’s IFSC district by protesters and said “They [the protesters] were objecting to what they claim was a payment of €1.5bn to unsecured AIB  bondholders.”

“What they claim”? WHAT THEY CLAIM? Would it have been beyond RTE to check that an unsecured, unguaranteed bond, ISIN number XS0294958318, totalling €1.5bn was being paid today by AIB, a bank 99.8% owned by the State which, together with EBS which it took over last year, has cost this State €20.7bn? Apparently it was beyond RTE to verify this, and so we get the “what they claim” terminology.

Elsewhere the Irish Times ignored the payment. As did the Irish Examiner and its sister, the Business Post.

Thankfully Ireland no longer relies on old media for news. The Journal reported it, Broadsheet reported it, WorldIrish reported it – with video from the occupation of AIB – and it was reported on here. And it has its own discussion thread on politics.ie and thepropertypin.com. Deputy Stephen Donnelly and Senator David Cullinane issued statements online. And there was a protest this evening outside the AIB in Charleville organised by the Ballyhea/Charleville communities.

Now it might be said that Ireland has already tried and failed to win its argument with the ECB and others, which would allow this payment to have been suspended or discounted; it might be said that AIB is a commercial company, though at 99.8% state-ownership, there is practically no difference between AIB and the State; it might be said that the €20.7bn in cash given by the State to AIB/EBS is water under the bridge and indeed, we might get some of it back. But to see one half of this year’s Budget 2012 adjustment fly out the door in 24 hours without a pipsqueak from most of Ireland’s old media, must surely undermine the credibility of what have been respected news organisations.

Or as RTE might say “what have been claimed to be respected news organisations”.

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Last week, a Northern Ireland company, “The Sprucefield Centre Limited”, filed its 2011 accounts – available here – and revealed that a GBP 8.5m (€10m) loan which that company had with Bank of Ireland, had been acquired by Westfield Europe Finance (No 2) Limited, a group company of the Austrialian shopping centre giant, Westfield. Westfield is already a joint-venture partner with the company behind Sprucefield.

The loan is understood to relate to the Sprucefield Centre which is a small shopping centre in Lisburn, county Antrim which opened in 1989 and which houses just four outlets – Marks and Spencer (the largest in Northern Ireland), JJB Sports, Boots and McDonalds fast food and also has 1,500 parking spaces.

Back in January 2012, the BBC reported that loans in the Snoddon group, based in Hillsborough, just outside Belfast, had transferred to NAMA. The group, associated with Brian Snoddon, includes The Sprucefield Centre Limited, and note 12 on page 14 of the accounts shows that the Bank of Ireland loan was transferred to Westfield last year. Although the loan is for less than the €20m acquisition threshold usually applied by NAMA to Bank of Ireland exposures, it should have been regarded as associated lending and acquired with the other Snoddon group loans.

It is not known how much NAMA received for the loan, though it seems that Westfield is still owed the full amount by Springfield.

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Costar, the UK commercial property website this morning reports that NAMA has sold a residential/commercial development in east London to a joint venture between a UK company called Development Securities and a Canadian company, Realstar Group. The development is at Wick Lane in Hackney and is next door to the Olympic Park where 27th July this year, the next Olympic games will commence. The Royal Bank of Scotland funded the transaction; so no NAMA staple finance needed, and evidence that some UK banks are lending. The brief press release from Development Securities is here.

The development comprises 112 apartments which occupy 116,000 sq ft and in addition, there is a nice 12,000 sq ft of office/retail space. Excluding the commercial space, the purchase price works out at just over GBP 140,000 (€168,000) an apartment for what would appear to be decent-sized apartments – 116,000 sq ft less 25% for common space divided by 112 apartments gives you 776 sq ft. The apartments are said to be in need of refurbishment and the development looks set to be rented to individual residential tenants.  Two-bedroom apartments in the area appear to be on the market for well over €300,000.

Development Securities was in the frame for the purchase of Gerry Gannon’s Chrome Portfolio of UK properties, though the status of that €120m transaction is presently unclear.

NAMA has shown a property on its monthly foreclosure list called “Riverside Works” at419 Wick Lane in London E3 which was being marketed by Allsop after BDO had been appointed receivers. The developer appears to have been a company called Silverpeak Limited whose sole director was Frank Silver, but it is unclear precisely which company NAMA took enforcement action against.

NAMA almost never comments on individual sales – confidentiality under the NAMA Act, donchaknow – but there is an attempt on here to track NAMA’s sales through media and other sources.Remember that NAMA is selling the equivalent of 30 of the above properties each month every month as it nears its December 2013 deadline by which it has indicated to the Irish bailout troika it will dispose of 25% of its assets.

UPDATE (1): 11th April, 2012. The agent’s sales brochure and supplementary information are now available. The photographs tend to increase the bafflement at the price obtained, with a handsome apartment block and well-specced apartments, though there is still some refurbishment required.

UPDATE (2): 11th April, 2012. The sales brochure describes the apartments thusly : “All 112 live/work units have been finished to a high standard with timber laminate floors, double glazed windows, electric panel radiators and video entry systems. The kitchens have marble worktops, AEG ovens and Electrolux fridge freezers, washing machines and dishwashers. The scheme has been vacant for approximately 12 months and therefore, some remedial works will be required to a number of units. The B1 office units are in ‘shell’ condition while the A1/A3 retail unit is completed and ready for a tenant to fit out.”

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