PensionDanmark, a Danish pension with close to €17 billion of assets under management, has bought a portfolio of project finance loans from Bank of Ireland, the bank announced in a note last week.
The loan book includes circa €270 million of drawn and undrawn commitments and was purchased for 83.5 percent of its face value. In a statement, the bank said “PensionDanmark’s investment will be managed by JP Morgan Asset Management’s Infrastructure Debt Group”.
In late 2011, JP Morgan formed a new infrastructure debt team, led by former consultant Bob Dewing, to focus on “infrastructure debt instruments, primarily seasoned loans with attractive risk-adjusted yields, originated by project finance banks”.
At the time, Dewing said “the growing volume of infrastructure debt holders looking to divest is exciting. However, our experience shows that few investors are actually able to access the full range of loans banks are holding”.
For Bank of Ireland, the sale marks a milestone of €10 billion in international loan sales, “a key component of the deleveraging plan,” the bank added.
Bank of Ireland has been steadily shedding infrastructure loans ever since it was told by Ireland’s central bank, in 2011, that it needed to raise €5.2 billion in new capital and sell some €30 billion of non-core assets following stress tests to the country’s banks. The bank is 36 percent-owned by the Irish state.
Recently, the bank sold a €200 million portfolio of project finance loans to Aviva Special PFI LP for 81 percent of its value. Last October, the bank managed to sell €670 million of project finance loans for a price of circa 92 percent of commitments. And in December 2011, it offloaded €590 million worth of project finance loans to Japanese bank Sumitomo Mitsui Banking Corporation for 85 percent of their value.