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Topic of the Day - NAMA completes its first transfer of loans.

Wednesday, 31 March 2010

Yesterday, the National Asset Management Agency (NAMA) completed the first transfer of loans from EBS and Irish Nationwide yesterday. The first Bank of Ireland loans will transfer on Friday, with Anglo Irish and AIB loans going to NAMA by early April. NAMA is expected to complete the transfer of all loans by February 2011.

Figures for the individual banks indicate NAMA will pay AIB €1.8bn for loans worth €3.3bn, a discount of 43%. It will pay €5bn for €10bn of Anglo Irish Bank loans, a discount of 50%.The discount for Irish Nationwide is even bigger, at 58%. The figures are 35% for Bank of Ireland and 37% for EBS.


NAMA also announced three institutions will invest €17m each, a total of €51m, in an entity called the Special Purpose Vehicle being set up to buy, manage and sell-off the loans identified by NAMA.

The three institutions investing the money are Irish Life Assurance, New Ireland and major pension and institutional clients of AIB Investment Managers. NAMA set up the SPV, which will be 51% owned by private investors and 49% by NAMA, in order to receive approval from the EU to keep the debts associated with the agency outside of the State's national accounts.

The SPV will have capital of €100m and private investors will be represented on its board, but NAMA will have a veto. The Dáil approved the Government plan to stabilise the banking system by 83 votes to 69.


Here to tell us all about what NAMA means, and the impact that it will have on us. is our finance expert on the Afternoon Show, Liam Croke.


For more information on NAMA and how it works, you can go to:


www.nama.ie
www.financialregulator.ie

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