Pearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance further to reports that Allied Irish Banks, in which he is the shareholder of 99.8% of the shares, has sold a portfolio of loans with a nominal value of €675m to Lone Star, if he will confirm the sale price of portfolio; if AIB will book an additional loss on the sale compared with the existing book value of the loans net of provisions, and if so, the quantum of the additional loss. [47279/12]

Michael Noonan (Limerick City, Fine Gael)
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The sale of loan portfolios is a commercial matter for the management and the Board of the Bank. I do not have a role in this function. AIB has informed me that EBS Limited has contracted to sell to Vesta Mortgage Investment Limited, (an affiliate of Lone Star), approximately €660m nominal of loan assets as part of its continuing strategy to meet its non-core deleveraging targets. The portfolio is primarily comprised of non-core Irish commercial real estate loans originated by EBS Limited.

The sale price is a matter of confidentiality between the parties. It is normal course of practice that sales processes are conducted under appropriate confidentiality constraints in order to protect the interests of all parties.

AIB is satisfied that it has maximised value for the Bank and its stakeholders as the portfolio was sold following the completion of a comprehensive two stage competitive auction sales process involving a number of credible international investors.

This transaction facilitated the deleveraging of a substantial non-core portfolio and subject to completion of closing conditions is expected to close prior to year end.

This sale brings AIB’s total net non-core deleveraging to date to 80% of AIB’s 3 year PLAR deleveraging target of €20.5bn. AIB remains on course to complete the majority of its total 2013 deleveraging targets by year end 2012 and to achieve this target in line with PCAR capital requirements assumed under the March 2011 exercise.

Pearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance further to reports that Allied Irish Banks, in which he is the shareholder of 99.8% of the shares, has sold a portfolio of loans with a nominal value of €675m to Lone Star, if he will confirm that arrangements will be made to ensure borrowers whose loans have been acquired by Lone Star, do not suffer inconvenience or loss. [47280/12]

Michael Noonan (Limerick City, Fine Gael)
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The sale of loan portfolios is a commercial matter for the management and the Board of the Bank. I do not have a role in this function. AIB has informed me that EBS Limited has contracted to sell to Vesta Mortgage Investment Limited, (an affiliate of Lone Star), approximately €660m nominal of loan assets as part of its continuing strategy to meet its non-core de-leveraging targets. The portfolio is primarily comprised of non-core Irish commercial real estate loans originated by EBS Limited.

Communication with affected borrowers has been a priority for the Bank and each Borrower will receive, in addition to verbal notification, a written communication from EBS notifying them of the sale. Subsequent to completion they will also receive further written communication from EBS and separately from Vesta Mortgage Investment setting out the arrangements for the management of their loans going forward. Affected Borrowers will continue to remain liable for the full amount of their debt. Their loan terms and conditions remain unchanged and are not impacted by the sale of their loans.

This sale brings AIB’s total net non-core de-leveraging to date to 80% of AIB’s 3 year PLAR de-leveraging target of €20.5bn. AIB remains on course to complete the majority of its total 2013 de-leveraging targets by year end 2012 and to achieve this target in line with PCAR capital requirements assumed under the March 2011 exercise.

Pearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance further to reports that Allied Irish Banks, in which the he is the shareholder of 99.8% of the shares, has sold a portfolio of loans with a nominal value of €675m to Lone Star, can he confirm the regulations that govern the relationship between Lone Star and the borrowers whose loans have been acquired. [47281/12]

Michael Noonan (Limerick City, Fine Gael)
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The sale of loan portfolios is a commercial matter for the management and the Board of the Bank. I do not have a role in this function. AIB has informed me that EBS Limited has contracted to sell to Vesta Mortgage Investment Limited, (an affiliate of Lone Star), approximately €660m nominal of loan assets as part of its continuing strategy to meet its non-core de-leveraging targets. The portfolio is primarily comprised of non-core Irish commercial real estate loans originated by EBS Limited.

The purchaser was selected following the completion of a comprehensive two stage competitive auction sales process involving a number of credible international investors. AIB has informed me that it is satisfied that by selecting the Purchaser following this sale process, it has maximised value for the bank and its stakeholders. This transaction was approved by the Boards of both EBS and AIB and AIB's De-leveraging Committee which includes non-voting observers from my Department and the Central Bank.

The loan terms and conditions of Borrowers whose loans form part of the sale remain unchanged and are not impacted by the sale of their loans. The Purchaser is not a regulated entity. It should be noted that this portfolio principally comprises commercial real estate loans which are not subject to the same level of regulation that applies to home loans.

Communication with affected borrowers has been a priority for the Bank and each Borrower will receive, in addition to verbal notification, a written communication from EBS notifying them of the sale. Subsequent to completion they will also receive further written communication from EBS and separately from Vesta Mortgage Investment setting out the arrangements for the management of their loans going forward. Affected Borrowers will continue to remain liable for the full amount of their debt. Their loan terms and conditions remain unchanged and are not impacted by the sale of their loans.

This sale brings AIB’s total net non-core de-leveraging to date to 80% of AIB’s 3 year PLAR de-leveraging target of €20.5bn. AIB remains on course to complete the majority of its total 2013 de-leveraging targets by year end 2012 and to achieve this target in line with PCAR capital requirements assumed under the March 2011 exercise.

Pearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance further to reports that Allied Irish Banks, in which he is the shareholder of 99.8% of the shares, has sold a portfolio of loans with a nominal value of €675m to Lone Star, if he will confirm the quantum of fees and commissions that AIB is paying to organisations which were engaged to assist with the sale, including fees paid to Morgan Stanley and legal fees. [47282/12]

Michael Noonan (Limerick City, Fine Gael)
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The sale of loan portfolios and the appointment of advisors is a commercial matter for the management and the Board of the Bank. I do not have a role in this function. However, AIB has informed me that EBS Limited has contracted to sell to Vesta Mortgage Investment Limited, (an affiliate of Lone Star), approximately €660m nominal of loan assets as part of its continuing strategy to meet its non-core de-leveraging targets. The portfolio is primarily comprised of non-core Irish commercial real estate loans originated by EBS Limited.

The purchaser was selected following the completion of a comprehensive two stage competitive auction sales process involving a number of credible international investors. This transaction was approved by the Boards of both EBS and AIB and AIB's De-leveraging Committee which includes non-voting observers from my Department and the Central Bank.

AIB has further informed me that it typically engages external parties to advise it on sale processes in order to avail of relevant and necessary experience and expertise. AIB does not disclose the amounts paid to these advisors for commercial reasons. As AIB has a strong focus on minimising the costs to the bank of these expert advisors, in each case, the bank undertook a competitive tendering process to select the advisors to assist in this sale process. These processes focused on relevant experience, product knowledge, quality of advisory team and fee structure. Furthermore, in the case of the sales advisor, fees were structured to incentivise the advisor to assist in maximising value for the bank and its stakeholders.

This sale brings AIB’s total net non-core de-leveraging to date to 80% of AIB’s 3 year PLAR de-leveraging target of €20.5bn. AIB remains on course to complete the majority of its total 2013 de-leveraging targets by year end 2012 and to achieve this target in line with PCAR capital requirements assumed under the March 2011 exercise.