€100m FUND LETS PROPERTY OWNERS BUY LOANS FROM 'VULTURE FUNDS' - Specialist lender Finance Ireland is rolling out a €100m fund it says will help Irish property owners refinance their property debts away from so-called vulture funds.
The company says it expects the new fund will be fully deployed over the next 12 months, financing commercial property-backed investments in the €1m to €6m range, writes the Irish Independent. A big focus is providing funds to owners whose bank loans have been bought by mainly US-based investment funds, allowing them to buy back the debts - potentially at a discount. Dublin-based Finance Ireland was founded in 2002 by former Irish Permanent chief executive Billy Kane. It is best known as a non-bank lender to small and medium enterprises (SMEs) and the farming sector, and for its motor and asset-based finance arms. Its Finance Ireland Commercial Mortgages unit said it has now raised €100m to lend to commercial property owners to finance exits from vulture funds. "Once a property owner is close to negotiating a deal with the vulture fund, they need to look at refinancing and that's where we come in," said Ken Murnaghan, managing director of Finance Ireland Commercial Mortgages. The loans are targeted at rent-generating investment and commercial property, but not development sites. Typical deals will offer five- year term loans at interest rates of 7% to 9% at a 75% loan to value ratio, he said.
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HAYES WARNS OVER LIMITS ON FIXED RATE MORTGAGE OFFERINGS - Irish MEP Brian Hayes has warned that banks may be restricted in how they offer fixed-rate mortgages in the future due to concerns among international regulators about the risks posed by these loans.
Mr Hayes said the Basel Committee, the primary global standard-setter for the prudential regulation of banks, is conducting an examination of “interest-rate risk in the banking book” with a view to proposing regulatory changes as to how they are offered and structured from 2018, says the Irish Times. “International regulators want banks to be better protected from interest rate risk,” he said. “It is considered that fixed-rate mortgages carry a risk in that the rate cannot be adjusted to reflect market conditions. “The Basel Committee generally advocates for variable rate mortgages since banks can adjust them according to market conditions and can link them to central bank interest rates. The Basel Committee believes that risks should be transferred from lender to borrower as much as possible. I do accept there are systemic risk issues that need to be tackled. But to restrict all banking practices to render them useless should not be the way to proceed," the MEP added. Variable-rate mortgages are the most popular form of home loan in Ireland, accounting for two-thirds of all new mortgage agreements in Ireland in the year to September 2016, both for owner-occupied properties and buy-to-let, according to Central Bank data.
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GOFFS PROFITS JUMP 15% ON €1.4m SALE OF PRIZED COLT - The €1.4m sale of a prized colt at the annual Orby sales at Goffs contributed to the group increasing its pre-tax profits by 15% to €2m in its last financial year.
Goffs' group ring turnover increased by 2.3% to €159.2m, prompting chairwoman Eimear Mulhern to describe the 12 months to the end of March as “very satisfactory”, says the Irish Examiner. Ms Mulhern - daughter of former Taoiseach Charles Haughey - added: “We believe that the year ahead will be one of financial consolidation. The effects of Brexit cannot be fully assessed at this early stage and its overall impact on the bloodstock industry is impossible to ascertain. “This calls for prudent management, constant monitoring of costs and early identification of potential risks. However, we are confident of a vibrant sales season this autumn.” Despite Brexit uncertainty, Goffs - which is celebrating its 150th anniversary this year - has recommended a dividend payout of 5 cent per share, due to be voted on at its AGM later this month.
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FRANKFURT STEPS UP BID TO WOO LONDON BANKS AFTER BREXIT - Germany is considering changing its labour laws to make Frankfurt a more attractive hub for banks looking to move staff out of London after Brexit, in the latest attempt by EU countries to woo financial institutions from Britain.
People briefed on the plan said Germany was looking at imposing an upper salary limit on employee protections of €100,000 or €150,000, which would make conditions such as redundancy terms less generous, reports the Financial Times. “Labour law wasn’t designed for people like this,” one person with knowledge of the situation said. Two senior bankers in London said the proposal had been part of pitches made in recent weeks by a German delegation promoting Frankfurt as a financial centre. However, the proposal comes as leading Wall Street banks indicated this weekend that they were more likely to relocate certain operations to New York than the euro zone if they shifted them from London. James Gorman, chief executive of Morgan Stanley, said that although the bank was looking at whether it needed a new headquarters in the euro zone, he thought “the big winner is going to be New York”. Germany’s finance ministry declined to comment on the labour legislation plans while the labour ministry said there were “no concrete plans” to change the law.
