March 30, 2012 by namawinelake
NAMA has this morning published the Direction that was issued by Minister for Finance, Michael Noonan to the Agency yesterday. A Direction is a formal instruction made pursuant to section 14 of the NAMA Act. Here is the Direction (click to enlarge)
Here is Section 2 of the NAMA Act referred to above.
Here is Section 12 (2) (r) of the NAMA Act referred to above.
It is hoped that NAMA will issue a press release for what is likely to be the Agency’s single biggest financial transaction.
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NAMA Wine Lake 
Who’d have ever thought that Nama’s biggest transaction to date would be to help bail out the State. Thank goodness that Nama is so profitable, productive and cash-generative that it could easily do this.
…lest anyone ever believed NAMA had ‘independence’ status.
And oh how we laughed at Bertie’s smoke and daggers gaff, never thinking it would one day become the modus operandi for running the country.
@ Brian Flanagan
“Thank goodness that Nama is so profitable, productive and cash-generative that it could easily do this.”
From recent Post “Sinn Fein splits NAMA wide open with trenchant questioning”
(6) Finally, we have confirmation that NAMA does not have any debt reduction target by the end of 2013 enshrined in any Trokia agreement. There are commitments for asset disposals, operational costs and governance but NOTHING about redeeming NAMA’s bonds”
It is easily to be “profitable” in these circumstances.
@Robert
So sorry but my comment about profitability etc. was meant to be sarcastic given that Nama could easily lose €5+ bn over its life.
I know, I know, I should have made this clearer.
I knew this whole Anglo note deal was an elaborate shell game. The promissory note hasn’t been cancelled at all. It’s being paid in full, using the cash from Nama, and this nonsense about a new government bond and all the other account-a-mancy is a cover story. Unfortunately, everyone seems to have swallowed it.
I suspected something fishy when this crazy last minute scheme was first proposed. But the acid test was the complete, screaming silence from the ECB on the entire matter. Despite the Irish Media’s best efforts to spin it otherwise, the ECB and troika have not actually given any go ahead to cancel the promissory notes. The Minister’s statement mentioned no such permission; the bit about the “commitment of our European partners” was simply a carefully worded ‘a non-confimation confirmation’, probably drafted by PR men in the DoF. Today’s IT has even backed off their print headline in the online edition.
This whole debacle has to be the single most convoluted, rushed, fudged, and desperate display of gombeen incompetence and misdirection in the whole Irish Financial Crisis to date. When the history books of this period are written, it will be hard to top this scheme for its sheer ham-fisted brazenness, and for the incredible gullibility of all involved in swallowing it whole.
While this really takes the political cake, my biggest worry is that this whole mad scheme was actually the product of a last minute dash to find the cash to pay off the promissory note. That Nama’s cash reserves were literally raided at the last minute because the Department of Finance and the NTMA couldn’t come up with the funds in any other way. That thought is a hell of a lot scarier than any display of eejitry, however farcical.
I’ve posted this on the main pro note thread but it’s relevant here as well after OMF’s post above.
Patrick Honohan said at the Finance Committee on Tuesday that the bond used for this transaction would be “a tranche of an existing bond”
I didn’t see any indication yesterday that this is indeed the case.
I’d be interested to know if this is the deal that the members of the Finance Committee were told about on Tuesday or if the details changed significantly in the interim.
Link to Finance Committee transcript:
http://debates.oireachtas.ie/FIJ/2012/03/27/00003.asp
The wording of the NTMA statement refers to its having “sold” a bond to IBRC at a particular “price”.
“Further to the recent announcement by the Minister for Finance, today the NTMA has sold €3.461 billion nominal of the 5.4% Treasury Bond 2025 at a price of 88.11 (yield 6.81%) to the Irish Bank Resolution Corporation. The bonds will issue and settle on Monday 2nd April 2012. The total consideration for this transaction is €3.060 billion and will be used to settle the promissory note liability due to IBRC on 31st March 2012.”
Is it possible that the series of transactions might at one point involve a cash payment by IBRC to NTMA? I had presumed that NTMA is paying off the Minster’s debt to IBRC with a bond, which in turn the Minister has directed must be repo’d by NAMA for cash. The use of the term “sold” seems odd in such a context.