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Archive for April 27th, 2012

NAMA is certainly taking its differences with Treasury Holdings to heart. As well as suing the founders, the colourful Johnny Ronan and understated Richard Barrett this week in respect of the so-called TAIL transaction,  today’s edition of Iris Oifigiuil reveals the Agency has had receivers appointed to three more companies in the Treasury Group.

The three companies in question are Bluetone Properties Limited (directors Richard Barrett, John Ronan and Niall Kavanagh), Simcrest Limited (directors John Ronan and John Bruder) and Oceanrock Limited (directors John Ronan and John Bruder). The receivers in all three cases are William G O’Riordan and Declan McDonald, both of Pricewaterhouse Coopers who were appointed on 20th April, 2012.

Remember you can see a comprehensive list of Irish foreclosure action by NAMA here and in this regularly updated spreadsheet.

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(The new properties added in March 2012, click to enlarge)

NAMA has today published its now regular monthly list of properties subjected to foreclosure action – the list shows NAMA foreclosed properties at the end of March 2012. The full list is here, the list of new properties added is here, and you will find previous editions of the monthly list which was first launched in July 2011, here. It is hoped to have the list in an spreadsheet format shortly, available here.

You should read the full list of NAMA’s terms for accessing the lists here. But in summary, this is what you’re looking at:

(1) Real estate property subject to loans in NAMA to which receivers have been appointed. The receiver’s website is shown against each property.

(2) This is all the real estate foreclosed sorted by country, and then region.

(3) Not all of the property may be for sale.

(4) Contact the receiver with enquiries or expressions of interest in the first instance. Only pester NAMA if you’re not getting any response from the receiver and make allowances for receivers being busy with queries, particularly after a new release of foreclosed property.

(5) If you think there are mistakes on the list, contact NAMA.

Comment and analysis here shortly.

UPDATE: 27th April, 2012. NAMA has issued a press release in which it says “The list includes 44 properties which were added in March. The total number of properties now listed is 1,195 (some of which are multiple properties such as apartment blocks). The updated listing includes assets which are for sale (with sales agents appointed) and which have an estimated market value, based on price indications guided by sales agents, in excess of €1 billion.”

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It’s Friday, so it seems unfair to have to scratch your heads at a conundrum that emerged from the High Court yesterday. NAMA Top 10 developer Treasury Holdings is in the wars with NAMA. In January, NAMA had receivers appointed to a slew of Treasury properties and companies; Treasury got upset and applied to the High Court in Dublin for a judicial review of NAMA’s dealings with its loans; the courts last month granted Treasury its wish for a judicial review which is set to take place in the coming months. Treasury is, according to NAMA and it doesn’t seem to be disputed by any party, “massively insolvent” – it has loans of €2.7bn including €1.7bn from NAMA and its assets are worth half that, so that NAMA says the company was insolvent to the tune of €859m. So NAMA, naturally enough given it is facing into an expensive court case where it will defend its dealings with Treasury’s loans, sought security for its costs (should it win of course). This preliminary point was set to come before the High Court yesterday, but just beforehand, NAMA came to an agreement with Treasury which is reported by the Irish Times today and is as follows:

Treasury provides the following as security for costs and damages (the Irish Times refers to “a fortified undertaking for damages based on those same resources [as detailed below]”)

(1) €600,000 in cash plus
(2) a charge over a 50 acre development site at Valverde, Cala Llonga in Ibiza
(3) a charge over a property at St Laurence’s Park, Stillorgan, Dublin
(4) a charge over 20 car parking spaces a tTownsend Street and Clanwilliam Terrace in Dublin

What is the total value of the above? Difficult to say, but a 50-acre development site in Ibiza alone, is likely to be worth millions of euro.But the mystery is how “massively insolvent” Treasury could magick up this security which presumably is unencumbered, that is, not subject to claims from anyone else including NAMA and Treasury’s other lenders who are owed €1bn.

Presumably NAMA has its “asset recovery specialists” examining the provenance of this security right now.

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At the end of March 2012 many observers might claim that NAMA crossed the Rubicon when it agreed to provide the Government with a temporary €3.1bn dig-out to pay the Anglo promissory note that was falling due. “Not so” says the Government, the Direction that was given to NAMA makes clear that NAMA is required under the NAMA Act to “address the serious threat to the economy” (section 2) and that NAMA is allowed “provide equity capital and credit” (section 14). And so NAMA tamely handed over €3.1bn of its €4.6bn cash mountain to Anglo for a period of up to 90 days and it is hoped that Bank of Ireland will reimburse NAMA in a month or two when its shareholders have had a change to vote on the transaction at an extraordinary general meeting.

And what will NAMA do with all this cash when Bank of Ireland does reimburse it? According to an interview with Bloomberg’s Neil Callanan this week, NAMA “will repay more than 3 billion euros of bonds this year”. What bonds are these? These are the pieces of paper that NAMA gave to the banks in 2010 and 2011 in return for the €74bn of loans it was acquiring. The bonds amount to €32bn in total, of which €1.25bn exactly have been repaid to date. NAMA must pay the bondholders – the banks from whom it acquired the loans a rate of interest equal to the 6-month Euribor rate, currently about 1.25% per annum. NAMA is required to redeem the bonds by latest 2020. To do so earlier is a matter of discretion for NAMA.

Yesterday in the Dail, the following parliamentary question was posed by Sinn Fein’s finance spokesperson Pearse Doherty and answered by Minister for Finance Michael Noonan

Pearse Doherty:
To ask the Minister for Finance if he will confirm that the National Asset Management Agency is not required to redeem its senior debt until 2020 and that NAMA is paying a rate of interest on its senior debt equal to the six month Euroibor rate; and if NAMA is entitled to invest its cash reserves in projects which support the Irish economy pursuant to sections 2 and 12 of the NAMA Act..

Michael Noonan:
The ECB did not provide loans to NAMA to acquire assets from the participating institutions. NAMA issued Senior Notes to the Participating Institutions which can be extended annually subject to the agreement of the note holders. NAMA has already redeemed €1.25bn of these Notes. I am advised that the objective of the NAMA Board is to redeem all Senior Notes on a phased basis by the end of 2020.

NAMA also advises me that it pays interest on its senior debt at the same rate as the six-month Euribor rate, which is reset in March and September.

Under the NAMA Act 2009, NAMA may invest funds to protect or enhance the value of the collateral securing its loans. Where it considers that it makes commercial sense to do so, NAMA may advance funds to projects, including projects located in Ireland, under the control of its debtors or receivers.

Now the Minister didn’t really answer the question asked of him, which is surprising really, given how expert he was in the workings of NAMA just a month ago when he danced his jig to repay the Anglo promissory note. Irelandis undoubtedly coming under pressure from the ECB to redeem the NAMA bonds which involves NAMA redeeming the bonds with the banks and the banks redeeming the bonds with the ECB which is presently lending funds to the banks secured on the NAMA bonds as collateral. But as our Finnish friend might say “pacta sunt servanda” and the “pacta” that underpin the NAMA bonds say that the bonds don’t need be repaid until 2020 and that they cost NAMA a measly 1.25% at present. And according to the “pacta” that underpin the operation of NAMA, NAMA can use its cash not just to “advance funds to projects, including projects located in Ireland, under the control of its debtors or receivers” as Minister Noonan coyly says above but in accordance with section 2 and 14 of the NAMA Act, can use its funds to support the economy.

And how exactly might NAMA support the economy with its mountain of cash? Step forward the NationalChildrensHospital. Indeed NAMA has submitted plans for a hospital at the site of one of its debtors atElmPark in Ballsbridge, so this project could be funded by NAMA without even overstepping Minister Noonan’s suddenly narrow interpretation of the NAMA Act. But the NAMA cash can be used for far more, it can extend schools, convert pre-fabs to permanent structures, build nursing homes or retirement villages, it could even build a proper prison. As long as NAMA gets paid back by 2020 and, in the interests of maintaining NAMA’s commercial remit, as long as NAMA generates over 1.25% per annum on the use of its funds.

In a country in a double-dip recession, with a 14.5% unemployment rate, with GNP contracting, with its highly educated young emigrating in search of work and with a vista of austerity in prospect for the next three years at least, you would really have to question why NAMA is allowed choose this time to hand over its cash mountain for bonds which are practically free. And why it doesn’t lend this cash into an economy on its knees but which is likely to have recovered by 2020 when the NAMA bonds contractually fall due for redemption.

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