Comments on: How many tens of millions did the Government waste on the single biggest asset disposal in 2012?

By: Fergus O'Rourke

Fergus O'Rourke — Tue, 08 Jan 2013 14:40:55 +0000

@NWL

We didn’t “buy a dog” (in that sense). We already had dogs, and we didnt disable their voice-boxes.

NAMA was never granted a monopoly on ownership or management of property loans in the State sector.

AIB (perhaps unfortunately, but there we are) is still trading. Buying & selling financial assets is one of the things that trading banks do.

By: namawinelake

namawinelake — Mon, 07 Jan 2013 22:15:34 +0000

@Fergus, if it can be simplified for you – “you don’t buy a dog and bark yourself” and having set up NAMA with a 10-year lifespan, obtained EC approval for the NAMA scheme which allows NAMA issue €54bn of bonds to buy loans including systemic loans, you don’t then have the 99.8% state-owned AIB sell €660m of loans to a private investor, Lone Star.

By: Fergus O'Rourke

Fergus O'Rourke — Mon, 07 Jan 2013 22:05:49 +0000

This is one of the most incomprehensible and irrelevant posts ever here. Fire the editor !

By: namawinelake

namawinelake — Mon, 07 Jan 2013 18:59:27 +0000

@Felicity, save for the NAMA subordinated bonds which comprise 5% of the loan acquisition value, Minister Noonan and NAMA are forever saying they are “confident” of breaking even which means covering the c10% LTEV paid to acquire the loans. There is skepticism here about that confidence which really hinges on how our property markets perform in the next eight years, but if Minister Noonan is consistent, then selling the AIB loans to NAMA would have saved the state millions.

By: namawinelake

namawinelake — Mon, 07 Jan 2013 18:56:36 +0000

@Niall, not sure about re-issue, this is what the NAMA Act says in Section 50

“(3) The aggregate of the principal of all sums outstanding for pur-poses other than the provision of consideration for the acquisition of
bank assets shall not exceed\5,000,000,000 or such other amount
that the Minister specifies by order for the purposes of this
subsection.
(4) The aggregate of the principal of all debt securities issued to
enable the provision of consideration for the acquisition of bank
assets shall not exceed\54,000,000,000 or such other amount as the
Minister may specify by order for the purposes of this subsection.”
http://www.attorneygeneral.ie/eAct/2009/a3409.pdf

By: Felicity Latters

Felicity Latters — Mon, 07 Jan 2013 18:11:26 +0000

This criticism only holds up if you assume that Nama will turn a profit on the loans. But the more loans Nama acquires, the more it needs to sell – within an ever decreasing period of time. That can only drive down the sale prices Nama achieves and make any profit increasingly less likely. Unlike wine property assets cannot easily be turned into something else or poured down the drain. Surely Nama needs to get on with the disposal of assets rather than further stockpiling.

By: Niall

Niall — Mon, 07 Jan 2013 14:55:40 +0000

Can NAMA re-issue bonds? Probably not the correct term but could it issue 22bn + 5bn development loans + 5bn previously redeemed?
32bn @ 0.75% that could come in useful for say a domestic mortgage crisis?

By: Howya

Howya — Mon, 07 Jan 2013 13:52:07 +0000

If the discount applied to the loans bought by Apollo from Lloyds/Bank of Scotland Ireland (at close to 90%) are any guide then indeed many millions have been lost. Granted the Apollo deal was neary three times bigger in nominal value but the geographic and property sector spread looks similar.