Although NAMA didn’t bother to issue any statement when it entered into its biggest financial transaction to date – the short term lending of €3.06bn to the Government so that the Anglo promissory note could be paid last March 2012 – nor did it issue a statement when it got the money back, it appears the transaction has now been completed and this is a short blogpost to record it. After all, it is NAMA’s biggest financial transaction to date…
The NAMA CEO Brendan McDonagh told an Oireachtas committee last Thursday that NAMA has now received back the €3.06bn that it was directed to lend to IBRC by the Government last March 2012 – in total the money was lent for less than 90 days and NAMA got its money back on 21st June. On 27th June, 2012 NAMA announced that it had redeemed a further €2bn of its senior bonds – remember NAMA issued €32bn of bonds, or IOUs, to buy the €74bn of loans from the bans and these bonds need to be redeemed by 2020.
Brendan says that NAMA made a profit of €6-7m on the transaction. Mind you, he says in the same breath that NAMA’s cost of funds was 2% so NAMA made a 0.35% or “35 basis points” profit on the transaction. For the arithmetically sharp amongst you, you’ll see the inconsistency – 0.35% of €3.06bn is €10.7m per annum and would be just €2.3m for 80 days – from 3rd April 2012 when NAMA handed over the €3.06bn to 21st June 2012 when it received it back. Yet Brendan claims a profit of treble that – good man, Brendan! Let’s hope that isn’t typical of the NAMA approach to calculating profits!
The loan transaction is detailed here and the Direction issued to NAMA by Minister for Finance Michael Noonan is examined here.
NAMA Wine Lake 
I’m sure you meant “€10.7m per annum and would be just €2.3m” – what’s a few noughts between friends. Keep up the great work.
@Brian, thanks! Was too busy criticising NAMA for trebling their profit that I managed to multiply it by 1,000!