Under pressure to reduce its holding of troubled loans, Allied Irish Banks PLC has struck a deal to sell a portfolio of roughly $1 billion in U.S. commercial mortgages to Blackstone Group LP and Wells Fargo & Co., according to people familiar with the matter, Dow Jones Daily Bankruptcy Review reported. Allied Irish Banks is selling off about $1 billion in troubled loans tied to, among others properties, the MetLife Building in New York, left rear.

Credit rating agency Moody’s has warned that Ireland could be pushed further into financial turmoil if Greece restructures its debt, saying bailout recipients could have debt downgraded to “junk” status if Athens defaults, the Irish Times reported. Amid renewed market attention on Spain and anxiety about new credit downgrades of Italy and Belgium, Moody’s made it clear yesterday that a Greek default would be “highly destabilising” and would have implications for the creditworthiness of bond issuers across Europe.

AIB and Bank of Ireland have lent €8 billion to small and medium business in the last year, €2 billion more than government targets, according to the latest quarterly report from the Credit Review Office, the Irish Times reported. The two main Irish banks – which are responsible for about 60 per cent of the lending market – had been required to lend €3 billion each to SMEs this year, as a condition of the State’s support for the banks.

Nama plans to launch a product for purchasers of residential properties in the autumn that will offer protection against the risk of negative equity in the future, the agency’s chairman, Frank Daly, said, the Irish Times reported. It is hoped that the initiative will help stimulate activity in the market. Mr Daly said Nama has identified concerns among debtors that house prices could continue to fall after they purchase a property as one of the “key impediments” to the sale of houses and apartments.

P Elliott, one of the largest construction companies in the State, has entered receivership with debts of more than half a billion euro, the Irish Times reported. Kieran Wallace and Cormac O’Connor of KPMG were appointed as receivers yesterday afternoon to P Elliott Company and a related company, Dewside Limited. While the receivers were appointed at the instigation of the directors of the company, they will work to retrieve money on behalf of Ulster Bank.

The wife and five children of businessman Seán Quinn have lodged a High Court action seeking massive damages against Anglo Irish Bank over alleged negligence, breach of duty and intentional and/or negligent infliction of economic damage, the Irish Times reported. The damages claim arises from events of the past two years that led to the family losing control of the Quinn group of businesses and is believed to seek hundreds of million of euros.

Irish Life and Permanent today announced its residential mortgage arrears continue to increase while demand for new mortgages "has been very subdued" so far this year, the Irish Times reported. The company had €13.1 billion of drawings from the European Central Bank at the end of April, down from €13.8 billion at end-December.

The IMF stuck to business on Monday despite the sexual assault arrest of managing director Dominique Strauss-Kahn, approving €1.58 billion ($NZ 2.8 billion) in new assistance to debt-laden Ireland, The New Zealand Herald reported. The International Monetary Fund said it had completed its latest review of the country's progress under the €85-billion European Union bailout package for the country, and was ready to release the newest tranche of its rescue loan.

Shareholders in Irish Life & Permanent meet on Wednesday for what is more than likely the last ever annual general meeting of the company in its current form, the Irish Times reported. Under the Government’s plans for the banking sector, IL&P will have disposed of or floated its life assurance business by this time next year. The remaining banking business, Permanent TSB, will have received a dollop of taxpayers’ money – about €4 billion – and will in effect be nationalised if it has not been merged or sold.

Changes in the bankruptcy laws to help people in difficulty with their mortgages will be published as soon as possible, the Department of Justice said last week, the Irish Times reported. A spokeswoman for the department said interim measures to reform the law on bankruptcy were being drafted with a view to publication this year. “The Bankruptcy Act 1988, as it stands, does not meet the needs of modern social and economic conditions,” said the spokeswoman.