Anglo sells hotel loan at €70m discount

ANGLO IRISH Bank has extricated itself from a lending agreement with one of New York’s most exclusive, and indebted, hotels by selling the loan connected to the development at a discount of $100 million (€70.5 million).

Following months of negotiations, real-estate investor Dune Real Estate Partners has paid $190 million for the $300 million loan connected to the exclusive Mark Hotel in the Upper east side of Manhattan.

However, a legal case involving the hotel is still ongoing. Two New York developers initiated legal proceedings against Anglo earlier this year, arguing that the bank breached a series of agreements relating to $500 million of loans that the bank made to the men and their companies to redevelop three Manhattan hotels: the Mark, Alex and Flatotel.

Developers Simon Elias, Izak Senbahar and a number of their companies are suing Anglo for $1 billion plus interest and costs, arguing that the bank should not sell on the loans.

Anglo is contesting the case.

Anglo had already sold on the loans related to the Alex and Flatotel, before the offloading of the loans relating to the Mark Hotel this week.

It is unclear whether the loans in question are being administered by Nama.

The write-off of $110 million is the latest in a series of loan write-downs engaged in by Anglo as the nationalised lender attempts to disengage itself from a number of troubled property financing deals in the US.

Anglo is being sued through the Irish courts in connection with a $50 million investment relating to two other Manhattan hotels.

The action, which has been taken by one Dublin investor, is regarded as a test action for cases by 23 other investors.

Anglo Irish Bank is defending the case.

The Mark Hotel is one of the most upmarket hotels in Manhattan. Developers Alexico, which bought the 84-year-old hotel at the top of the economic cycle, spent approximately $200 million on renovations.

It had planned to raise hundreds of millions of dollars by selling a portion of the hotel’s 160 units as luxury co-ops, but failed to find sufficient interest, selling only a handful of properties.