Earlier this decade, when the Celtic Tiger was in full swing in Ireland and the property market was booming here, Anglo Irish Bank made a name for itself as the go-to lender that quickly became a Boston developer's best pal. No loan, it seemed, was ever refused - no matter how small or big.
But all that's at a end now. David Drumm, Anglo's former CEO is bankrupt and anxious to postpone his questioning by the Irish authorities. And for many of Anglo Banks former Boston area customers thing are looking decidedly uncomfortable too.
Last week Anglo issued foreclosure proceedings against the owners of One Kendall Square, a massive office and retail complex in Cambridge. Surprisingly, the property is operating at 90 percent capacity and business is booming - but it turns out that may be why Anglo is pursuing it now.
As the most attractive asset in Anglo's U.S. portfolio, local real estate watchers believe it was a sitting duck. Strong borrowers with good loans - One Kendall Square's owners have never missed a payment on their $180 million mortgage - are now the first targets for aggressive action. The truth is the represent the best hope of recouping significant cash in Dublin.
Squeezing capital out of stable American investments represent the now nationalized bank's best chance of quelling popular resentment from the Irish taxpayer, who has been forced to shoulder staggering losses.
It's anticipated that other major Boston developers who borrowed from Anglo may soon feel the heat too. All are performing well and making their monthly repayments on schedule. However, as One Kendall Square recently discovered, that's not the guarantee it used to be.
Anglo will be seeking to send funds back to Ireland as much as they can knowing that Irish taxpayers are clamoring for relif. In the process they will try to end run perfectly good mortgages in America it seems. It is a strange twist in a very strange episode.