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Goldman-Brookfield consortium wins bid for BOSI

Friday 25th November 2011

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A consortium made up of investment bank Goldman Sachs and Brookfield Asset Management has won the bid to buy a billion-dollar New Zealand loan portfolio from Bank of Scotland International.

The consortium bought loans on 22 local properties mainly in Auckland, Wellington and Christchurch with an original face value of some $1.3 billion as part of a two-pronged divestment by BOSI, a spokesperson for the Australian lender said. BOSI also sold A$700 million of loans on the Gold Coast to the Morgan Stanley Real Estate Fund.

The New Zealand portfolio includes loans over the HSBC Tower on Auckland’s Queen Street and land earmarked for development in Albany on the North Shore.

The Australian Financial Review reported the Goldman-Brookfield group paid $450 million to $470 million for the portfolio, though the lender declined to comment.

The tender closed last week, and reportedly attracted interest from the Todd family’s property arm.

BOSI was caught up in several high-profile property development failures that sparked the collapse of New Zealand’s finance sector over the past four years, financing developers including Terry Serepisos and Nigel McKenna.

The Australian lender had gross loans and advances worth A$12.16 billion with A$1.98 billion provided for impairment losses as at Dec. 31, according to its 2010 financial statements lodged with the Companies Office. The value of impaired loans was A$4.17 billion as at Dec. 31, or 34.3 percent of closing advances, up from A$2.22 billion, or 15.8 percent, a year earlier.

British lender Lloyd’s Banking bought out BOSI-parent HBOS, the holding company for Halifax and Bank of Scotland brands, in 2009 for 12.2 billion pounds in a deal personally brokered by then UK Prime Minister Gordon Brown.

BOSI has been selling its loans on New Zealand property, with Singapore-registered Quilington assuming a $62 million loan over St Laurence Property Development Fund’s Mount Maunganui project earlier this year.

In September, the Singapore-based investor bought BOSI’s loans over the Kawarau Falls Station development, giving it control of the Queenstown Hilton hotel and Kawarau Hotel at Kelvin Heights. BOSI was owed $154.8 million on the Kawarau Falls Station project, as at July 19, according to the latest receiver’s report for Melview (Kawarau Falls Station) Investments.

Quilington also bought a $16.6 million loan from BOSI over Auckland’s Westin Hotel.

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