Earlier this week, NAMA told a gathering in Cork that it had €0.6bn (USD $840m) of loans relating to property in the US. This was the value placed on the loans by NAMA – if the average NAMA acquisition haircut of 58% was to have applied to these loans, then they might have a face value of €1.4bn (USD $2bn). Britain’s Property Week today reports that NAMA is carefully following the progress of portfolio sales by Bank of Ireland and Anglo of their US loan books, and is considering a similar move itself.
NAMA re-iterated this week its self-imposed target of reducing its loan book by 25% in the next 30 months. NAMA has paid €31bn for loans with a face value of €72bn. It’s not exactly clear what a 25% reduction would mean but the most likely interpretation is that NAMA would see 25% of €31bn repaid by the end of 2013.
Less than three weeks ago, it was reported that Allied Irish Banks (AIB) had sold a USD $1bn loan portfolio secured on commercial real estate to the “wait until there’s really blood in the streets” Blackstone, and to Wells Fargo. The price achieved seemed reasonable with only a 7-15% haircut. It is understood that AIB has additional loans of some US $2bn that it is also trying to sell.
Anglo is said to be at an advanced stage in its plans to sell a US $10bn portfolio and Minister for Finance, Michael Noonan has indicated that the sale will have commenced “by Christmas (2011)”. Details of potential buyers and haircuts have not made it into the public domain so far.
And Bank of Ireland is also selling a US $1.8bn loan book, also thought to be secured on commercial property. There had been rumours that the loan book was close to a sale at 84c in the dollar. Recent reporting states that the bank has engaged Holliday Fenoglio Fowler LP to advise on the sale.
So reports that NAMA is considering the sale of its own portfolio, which would potentially include loans the agency acquired from AIB, Anglo, Bank of Ireland, the Educational Building Society (EBS) and the Irish Nationwide Building Society (INBS), have a ring of credibility to them and may represent a means to secure a one-off substantial sale to assist it in its self-imposed target for debt reduction.
UPDATE: 12th August, 2011. Wells Fargo is reported to have bought Bank of Ireland’s US commercial real estate portfolio of loans. The final par value of the loan portfolio is said to be USD $1.4bn, rather than USD $1.8bn shown above. Elsewhere Anglo is reported by the Irish Independent to have hit snags in its sale of its US portfolio. Again the par value of the portfolio appears to have declined to USD $9.5bn but apparently bids have maxed out at the USD $7bn mark, USD $0.5-1bn less than hoped for but USD $400m more than the USD $6.6bn written-down value at 31st December, 2010 (€6.6bn less €1.9bn provision * 1.42). Bidders for the Anglo portfolio are said by Laura Noonan to include “Deutsche Bank, Goldman Sachs, JP Morgan Chase, Wells Fargo, Lone Star Funds, TPG Capital and Blackstone Group” and it is further reported that bids have been submitted in respect of tranches of the total portfolio.
NAMA Wine Lake 
. It’s not exactly clear what a 25% reduction would mean but the most likely interpretation is that NAMA would see 25% of €31bn repaid by the end of [b]2103[/b]
Freduian slip?
@D_E, thanks, Freudian slip corrected.
Is Nama looking to sell Loans at the same level that it purchased them for?
If this is the case, won’t the purchaser just be looking for a return on their purchase price and hence be a lot more willing to write-down loans for developers?
If so I wish BOI and PTSB would get their finger out and sell my mortgages to a vulture.
@BR, Fair question in that NAMA has said its first priority is to recover what it paid for the loans and anything extra it has advanced.
it was blackstone not blackrock
@John, thanks, corrected.
more interesting is that Eastdil got a 10 billon assignment after Wells Fargo stepped up
Wells is still digesting Wachovia and has been selling US loans…they own Eastdil
@NWL
Re: Your answer to BarrierReef at 2.42pm.
Did NAMA really say ‘first priority’? Next they’ll be talking about ‘reverting back’ or, even, ‘advancing forward’! The word for this is ‘pleonasm’.
Incidentally NWL, one of my favourite stand-up comedy lines of all time is that of some US comedian who said: “I was flicking through a dictionary recently and saw the definition of ‘potato’ as ‘farinaceous tuber’; do you think someone who wouldn’t know what a potato was would understand ‘farinaceous tuber’?”
@Bunbury, hmmm, I wonder if that is always right? Can an organisation or individual have more than one priority? For example NAMA’s human resources priority might be to recruit that extra 60 people that it flagged last Tuesday bringing its total complement to 200, its IT priority might be to get all of those properties to which it has appointed receivers uploaded onto its website, its priority in Northern Ireland might be to undo the damage that Taoiseach Kenny did when he suggested last Monday that there was skulduggery afoot in NAMA, its financial priority might be to break even over its 10-year lifespan.
Could it have a number of priorities and therefore could it operationally (as well as grammatically) have a “first” priority?
PS. As always thanks for keeping the grammar honest, and “pleonasm” is a term that didn’t previously register, but it seems akin to “tautology” which certainly has.
Curious that we have heard nothing in almost a year about NAMA’s circa $800 million US loan portfolio. It was said that NAMA only took Anglo’s US development loans and that Anglo retained the more salable investment loans, which were subsequently sold to Loan Star / Wells Fargo last year.
Are the dregs of the Anglo (and AIB?) US loans so bad that NAMA can’t find a buyer? Or is the price on offer so low that NAMA don’t want to trigger – and admit – the loss?
@WSTT nothing stateside,the markets they were active in have strengthened too.