Long Term Economic Value – changes to terms?

The Independent today reports that Brian Lenihan signed into law last Wednesday a new valuation methodology for NAMA assets. This blog is trying to get hold of what was signed and will have a link here shortly. The Independent says

“Crucially, the net effect could change the amount being paid by the taxpayer for €77bn of loans.

It is quite possible that the allowance on the long-term economic value of the loans which the finance minister estimated at 15pc last September could now be lower.

However, this won’t become clear until the loans are transferred and the final current market value figures are known.”

Meanwhile the Irish Times today reports on a recent legal conference where the suggestion was advanced that the Minister of Finance’s role in overseeing the LTEV valuation may not be constitutional.

This blog has been predicting for a week that the Long Term Economic Value (LTEV) as defined in the 2009 NAMA Bill would mean that a LTEV premium of some €15bn was now payable compared with an estimate of €7bn last September because a long term estimate of value will not have altered significantly in the 5 months since September 2009 even though the property market that was down 47% in relation to NAMA loans is now down 55%.

Meanwhile we still do not have the EU Decision from 26th February, 2010 which would presumably detail the changes it proposed to the valuation methodology. This is what their website said this morning regarding the Decision which sources suggest might be months before it is published.