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National Asset Management Agency – First Loans Transfer

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National Asset Management Agency – First Loans Transfer

The Clean Up begins

On Tuesday, 30^th of March, the National Asset Management Agency (NAMA) acquired over 1,200 individual loans with a nominal value of € 16 billion for a consideration of € 8.5 billion, representing a total discount of 47%. It completed the transfer of the initial tranche of loans from Irish Nationwide Building Society and Educational Building Society on 29^th of March. The Agency will transfer the first batch of loans from Bank of Ireland on Friday, 2^nd of April and expects to complete the acquisition of the first tranche of loans from the two remaining participating institutions – Allied Irish Bank and Anglo Irish Bank by early April.

NAMA expects to complete the transfer of the remaining loans from all five institutions by the end of 2010 and no later than the end of February 2011, the deadline set by the European Union Commission. In total, the Agency anticipates that it will purchase € 81 billion of loans from the five financial institutions.

Details of the first tranche of loans acquired or about to be acquired by NAMA from the institutions are set out in the following chart:

Participating Institution	Book Value of Loans Acquired	Value of Securities exchanged for loans	Discount	Discount %
Allied Irish Banks plc	€3.29 billion	€ 1.88 billion	€ 1.41 billion	43%
Anglo Irish Bank	€10.0 billion	€ 5.0 billion	€ 5.0 billion	50%
Bank of Ireland	€1.93 billion	€ 1.26 billion	€ 670 million	35%
Irish Nationwide Building Society	€670 million	€ 280 million	€ 390 million	58%
EBS Building Society	€ 140 million	€ 90 million	€ 50 million	37%

Total

€ 16 billion

€ 8.5 billion

€ 7.5 billion

47%

The loans can be analysed by a geography and type of underlying asset breakdown as follows:

Location	Value of Securities exchanged for loans
Republic of Ireland	€ 4.9 billion
Northern Ireland	€ 0.0 billion
Britain	€ 3.2 billion
Other	€ 0.4 billion
Total	€ 8.5 billion

Type of Underlying Asset	Value of Securities exchanged for loans
Investment Property	€ 5.5 billion
Land ( including development less than 30% completed)	€ 1.3 billion
Hotels	€ 0.8 billion
Development (greater than 30% completed)	€ 0.5 billion
Residential property for resale	€ 0.4 billion
Total	€ 8.5 billion

The Chairman of NAMA, Frank Daly speaking on 30^th of March 2010, stated “ NAMA is a key element to the Irish Banking Sector. Thanks to the considerable effort, dedication and skill of those involved in NAMA, the loan transfers have commenced with a month of European Union approval. The Board of NAMAs guiding principle to date has been to safeguard the interest of the taxpayer by taking a scrupulously objective view of the value of the underlying assets and the security attaching to each and every loan. We will remain resolutely focused on taxpayer’s interests as our work continues in the months ahead”

The Chief Executive of NAMA, Brendan McDonagh has also declared that borrowers whose loans that have been acquired by NAMA will be required to submit a comprehensive business plan in accordance with NAMAs template within 1 month outlining how they propose to honour their loan commitments. Where these plans are approved by NAMA, it will monitor the borrowers’ subsequent performance to ensure they adhere to the targets contained in the approved business plans. Where these plans are not approved or not received, NAMA will take whatever actions it considers necessary to protect the interests of the taxpayer.

John McCarrick
John McCarrick and Associates
11 Dunville Avenue, Rathmines
Dublin 6,Ireland
Telephone:01 4960102
Fax: 01 4973717

Email: info@jmccarrick.com

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