It says something about the secrecy of NAMA that we have not had a detailed update on tranches absorbed by the agency since 23rd August, 2010 – nearly seven months ago. Let’s review what we know about NAMA’s progress in absorbing the remaining loans.
(1) In August 2010, NAMA announced that it had absorbed Tranche 2 bringing to €27bn the then-cumulative total value of loans absorbed at face value.
(2) In December 2010 the NAMA chairman, Frank Daly provided a pre-Christmas update and said that €71bn of loans had been absorbed and indicated that another €2bn (deduced from the total earmarked to be absorbed €73.4bn per Frank’s statement less €71.2bn already absorbed) remained which were understood to be Paddy McKillen’s loans.
(3) In February 2011, the word from NAMA was that the loans absorbed still stood at €71bn but the outstanding loans had crept up to €5bn from €2bn previously. Absorption of the remaining €5bn was to take place “as soon as practicable” and the €5bn was understood to include €2.1bn of Paddy McKillen’s loans plus those of other developers who had objected to NAMA absorbing their loans.
(4) Yesterday, AIB announced that it had transferred further loans to NAMA “Allied Irish Banks, p.l.c. (“AIB”) [NYSE:AIB] announces that on 4th March 2011 it transferred loans to NAMA totalling €1.1bn. These loans are part of the previously advised final tranche to be transferred to NAMA at a discount of c. 60%” said the brief press release.
(5) Today, the press (here and here for examples) is reporting that there is now €4bn of outstanding loans to be absorbed by NAMA. The Irish Times goes further and claims “of the €4 billion in big loans outstanding to Nama, they include about €1.1 billion relating to developer Paddy McKillen” which is odd because as we all know from the extensive coverage of Paddy’s ongoing court case, Paddy has €2.1bn of loans, not €1.1bn and they were reported to comprise €0.9bn at Anglo, €0.3bn at Bank of Ireland and €0.9bn at AIB.
So there are a few questions that suggest themselves now, with respect to NAMA’s straggling loans
(1) What is happening with Paddy McKillen’s loans? AIB’s announcement yesterday of the transfer of €1.1bn of loans together with press reporting today that Paddy McKillen’s loans to be absorbed are now €1bn down from previous reporting and the understanding that Paddy had €0.9bn of AIB loans, all suggest that NAMA has now absorbed €1bn of Paddy’s loans following the agency’s announcement a month ago that it was going to consider whether or not to make a fresh decision to absorb Paddy’s loans following the Supreme Court’s determination that NAMA’s decision in December 2009 to absorb Paddy’s loans was not validly made.
(2) If yesterday’s announcement does mean that some of Paddy’s loans have been absorbed by NAMA then what is delaying the absorption of the remaining ~€1bn of Paddy’s loans? There is intense activity around Paddy’s Maybourne group at present with many high-profile investors being mentioned as interested in buying part of the luxury hotels group which is heavily indebted to NAMA/NAMA Participating Institutions.
(3) What is preventing the absorption of the remaining €4bn of loans? Is it related to the ongoing Paddy McKillen appeal at the Supreme Court and remember the judges there have still not ruled on three of the strands to Paddy’s appeal. Will the delay in absorbing these loans be affected by the Fine Gael/Labour Programme for Government which promises to “end further asset transfers to NAMA, which are unlikely to improve market confidence in either the banks or the State”
In addition to the €4bn (or €5bn if you don’t believe today’s press reporting) of straggling loans, there is some €12bn which comprises sub-€20bn land and development lending at AIB and BoI (€16bn if you include associated lending). According to what I would describe as emphatic statements from both Labour and Fine Gael, these smaller-value loans will not be absorbed by NAMA.
Lastly Fine Gael and Labour will have the opportunity to match their deeds to their communicated intentions of making NAMA more transparent, by forcing the agency to produce a detailed update on loans absorbed – it is astounding that since the detailed updates last August which analysed €27bn of loans, we have had no detail at all on the €45bn subsequently absorbed.
NAMA Wine Lake 
As of today NAMA have “processed” 175 borrowers. (That doesn’t mean that they have actually done anything other than accept the loans relating to them).
It is the belief of those within NAMA that, as a result of the new government’s policies, they will not get any more and that they will be left to deal with the affairs of the 175.