NAMA has rolled out its new business plan format to be followed by developers whose loans are absorbed outside Tranches 1-3 (yes 3, even though nothing was published about that tranche which was intended to be transferred by the end of September 2010).
It seems that the new Excel datapack is 96mb in size (that’s for the 2003 Excel version, though the 2007 Excel version is 46mb). That’s huuuge and equal to about five MP3 albums. A review of the narrative parts of the new requirements indicate that NAMA has simplified the presentation and is now focussing on quick repayment of the debt and preventing any transfers/disposals/squirreling away of property – there is even a declaration to be signed pursuant to the Statutory Declarations Act, 1938 which includes a provision – “Every person who makes a statutory declaration which to his knowledge is false or misleading in any material respect shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding fifty pounds or, at the discretion of the Court, to imprisonment for a term not exceeding three months or to both such fine and such imprisonment.”
There will be further analysis and comparison with the old datapack when we can get the Excel spreadsheet downloaded.
NAMA Wine Lake 
NAMA has started sending out business plan approvals, but NO developer has signed up to one yet.
My mole tells me that the approvals start with multiple pages of a confidentiality agreement. Disclosure of the offer/agreement to anyone basically negates it. NAMA can renege on the agreement without giving any reason at any time during its lifetime.
The interest margin for the loans taken over from the banks is to be 2.5% and the margin on any money lent to complete developments is quoted at 4%.
NAMA is also looking for a large (think region of 20%) “commitment fee” to be added to the accounts!
Homes, whether belonging to the wife or not, are to be mortgaged or sold after a number of years and a sub €500,000 allowance will be made available on such sale for the purchase of a new house.
Projected budgets for overheads are cut by 50% and the builders’ toys are to be sold immediately.
Any money in bank accounts are sequestered and NAMA require a sweep of all gross rental receipts.
The tenant / landlord relationship will become a tenant / NAMA relationship.
There are other details but as yet I feel that they might be client specific and I don’t want to blow his cover. When I see other offers, I’ll post the details here.
I am aware that NAMA had actually agreed a deal with one of the top ten, but altered on it and changed the terms after he signed. The new terms are under consideration.
The developers are given a short number of days (again I don’t want to be specific) to sign – or face the wrath of the legal brigade.
For the developers, its a choice of “Gas chamber now, or penal servitude now and gas chamber later? If you choose the latter we’ll give you the minimum wage to look after things in the interim”
So much for choices. I imagine most developers will decide to reject this offer and reach for their lawyer – or their passport….. but you never know.
Hi WSTT, I must say that if this is NAMA’s approach, it’s tough but surely allows a project to be completed (ECB + 4% is not bad when the private equity lads are looking for 13% mezzanine without risk or 30-40% per annum with risk). NAMA probably want to compartmentalise agreements so they don’t get played off by different developers (likely to happen anyway knowing the close contacts maintained in the sector). NAMA looking for spouse’s property will be interesting given the state of the law but again I expect they’re coming at this from the perspective that all transfers were to deprive NAMA or the banks.
It’s difficult to tell from the general description above but I see nothing there that would upset most of NAMA’s stakeholders. Of course a 50% reduction in overheads could be difficult and that’s not the same as a 50% reduction in developers salaries – it could well be a 99% reduction in developer salaries because support staff etc won’t be able to take 50% reductions (they’ve already taken 10-20% reductions in basic and bonuses are a thing of the past in my experience and are struggling – you can’t cut an experienced secretary on €30k a year by 50%).
I’d be interested to hear what the developers think is in it for them. Plainly they have loans to repay to NAMA though ultimately the loans may be non-recourse or corporately ringfenced so they may have the option of saying “feck it, take the company or project”. Those with unlimited personal guarantees or with unlimited liability will be in a very difficult spot and may be facing bankruptcy plus (the “plus” referring to the fact that these were high worth individuals and their affairs will be examined far more closely than an ordinary Joe and given who they are they will be pursued to a greater extent). When you say “minimum wage” you’re probably comparing their current rewards with those during the boom or indeed the normal times before the early 2000s. Surely a developer could get terms which recognise personal effort such as a stepped profit share that repays NAMA and incentivises the developer?
Aah… but what about the 20% commitment fee? To be fair, I haven’t contacted my source to ascertain whether this is on the 4% funds or all the funds – but I will. I think it’s the fact that they attack the assets of other family members (not only wives) when it is not justified that will rankle most.
And of the two offers that I have heard about as of this evening, the first one (above) shows some element of banking by completing unfinished apartment developments; the second, in a similar location, is inconsistent with this and is purely a liquidation over a period. Odd, but perhaps when I dig a little deeper there may be some logical explanation. They say “the devil is in the detail.” We shall see.