AIB Group PLC agreed to sell a nonperforming loan portfolio in long-term default to Mars Capital Finance Ireland DAC for a cash consideration of about €400 million.

The portfolio consists of 4,000 nonperforming customer connections, with 90% of the portfolio first entering default more than seven years previously.

As of September 2020, the portfolio had a gross nonperforming exposures value of €600 million and fully loaded risk-weighted assets position of €400 million. The transaction is expected to be capital accretive because of the reduction in risk-weighted assets.

The deal is part of a consortium arrangement with Mars Capital Finance Ireland and affiliates of Apollo Global Management Inc., the U.S. investment manager said to be chosen to sell the Irish bank's portfolio of nonperforming loans named Project Oak.

AIB is set to contact impacted customers now to inform them that their loans are being transferred.