Latest deal is also backed by private equity giant Apollo
PTSB is currently for sale. Photo: Collins
PTSB, which is majority-owned by the State, is selling €76m of problem loans to Mars Capital in a deal backed by private equity giant Apollo.
It’s the second tranche of non-performing loans sold by PTSB to Mars. Last year it offloaded a tranche worth €348m, in a deal that was also backed by funds managed or sub-advised by Apollo.
PTSB said it does not anticipate any further loan sales, and stressed that this deal is unconnected to a recent decision to put itself up for sale.
The latest tranche of loans sold by PTSB, in which the State has a 57pc stake, includes about 490 loans secured over roughly 455 properties. The loan accounts are linked to about 410 borrowing relationships, according to PTSB. A borrowing relationship can include a single buyer or joint borrowers.
All the loans are classified as non-performing, with 55pc of them being tracker mortgages, while 10pc are fixed-rate and 35pc are variable rate.
The first tranche of non-performing loans sold by the bank last year comprised 1,244 loan accounts secured over 1,489 properties.
The loans within the portfolio that has just been sold will continue to be serviced by PTSB for a period of up to six months.
“While the loans are being serviced by PTSB, customers will continue to have the right to avail of PTSB’s mortgage products, interest rates and services subject to applicability and/or terms and conditions,” the bank said. “At the end of this period, legal title and loan account servicing will transfer to Mars Capital.”
PTSB stressed that all customers whose loans are included in this sale will continue to have the same regulatory protections under the Consumer Protection Code and the Code of Conduct on Mortgage Arrears (CCMA) after the sale.
The latest loan sale will increase PTSB’s total capital ratio by about 10 basis points.
“This transaction also alleviates the negative capital impact of regulatory calendar provisioning associated with this portfolio, which based on existing risk weights and capital requirements is equivalent to circa €500m of new lending,” noted the bank.
The deal will reduce PTSB’s non-performing loan ratio to about 1.4pc on a pro-forma basis in respect of the first half of the year.
PTSB, whose CEO is Eamonn Crowley, put itself up for sale last month. It said a new owner would support the next phase of growth.
