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Report: Cerberus leads race for AIB's bad loan portfolio

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Report: Cerberus leads race for AIB's bad loan portfolio

U.S.-based Cerberus Capital Management LP is leading the race to acquire a portfolio of soured loans from AIB Group PLC, The Irish Times reported, citing sources.

The portfolio, dubbed Project Redwood, includes loans against commercial property, buy-to-let mortgages and land. The portfolio initially comprised about €3.8 billion in nonperforming loans but is now expected to be sold with a little more than €1 billion of debt as some loans have already been restructured, according to the May 12 report.

Sources told The Irish Times that AIB had removed private dwelling home loans linked with distressed commercial borrowers from the portfolio before officially putting it on the market, a move that allowed the bank to rule out the disposal of home loans when it reported its full-year 2017 results in early March.

Goldman Sachs Group Inc. and private equity firm Lone Star are the other two bidders vying to purchase the NPL portfolio. The Irish lender could pick its preferred bidder as early as in the week of May 14.

AIB Group is the listed holding company of Allied Irish Banks PLC.