In January 2012, NAMA appointed two panels of companies to provide “loan sales advisory” services – a European panel and a US panel. There are 13 companies on the European panel and 10 on the US panel. According to reliable sources, it appears that NAMA has now plumbed for one US company to sell off most of its legacy US loans. The company is the Boston-headquartered The Debt Exchange or DebtX and it is understood that over the next three months, DebtX will seek to sell off most of NAMA’s legacy loans in the US.
According to the 2011 NAMA annual report (see above), some 16% of its non Ireland/UK portfolio of loans relates to US assets so the loan sale could top 16% of €2.7bn or just over €420m at NAMA values – NAMA paid an overall total of €32bn for its loans, of which €2.7bn are related to property outside Ireland and the UK. We don’t know what haircut NAMA applied to US loans but if it paid 43c in the euro as it did on average across its entire portfolio, then the US loans could be worth €1bn at book values but the betting is the US loans hadn’t deteriorated to the same extent as loans in Ireland, so the book value could be substantially less .
DebtX is a reasonably well-known firm in the USA. Its basic value proposition is access to the largest number of (distressed) loan buyers. It is most experienced in selling commercial mortgages in the USA though it also has a large portfolio of US residential non performing loans from FreddieMac and the US Dept of Housing and Urban Development. The company has tried to develop business across Europe over the past eight years, but industry sources claim it has had little success.
Their business model is to establish a minimum portfolio valuation with the seller-client, in this case NAMA and presumably NAMA will want to recover at a minimum what it paid for the loans; DebtX then markets the portfolio and organises bids – bidding similar to the way an estate agent generates bids – and DebtX earns a high fee when the portfolio sells for a price above the agreed threshold and no fee at all if it sells below the threshold.
It seems that NAMA is accelerating the disposal of non-Irish assets, though given the chronic lack of credit and vertiginous price falls in Ireland, perhaps that is understandable and it seems the future NAMA strategy will be to focus on loans and assets in this jurisdiction where familiar geography, politics and markets can be more easily managed. Indeed it would have been surprising if NAMA seriously considered a ‘hold and loan service’ strategy in the US because it would need rely on many remote third parties.
Neither NAMA nor DebtX had any comment on the matter at time of writing.
UPDATE: 18th September, 2012. The NAMA spokesperson from Gordon MRM has responded to a request for comment on the claim that DebtX has been appointed to dispose of a NAMA US portfolio to say “that information is incorrect”.
NAMA Wine Lake 
@NWL, Shades of Mandy Rice-Davies and NAMA being Jesuitical again. It reminds me of the time they poured cold water and issued denials on your revelation that they had sold the old Anglo Headquarters to the Central Bank.
https://namawinelake.wordpress.com/2012/03/24/exclusive-nama-sells-former-anglo-hq-shell-to-the-central-bank-of-ireland/
They obviously haven’t told their PR department yet. Knowing them, they probably haven’t filled in the Form A or signed contracts yet.
That’s what you get for being ahead of the news…….
@ NWL,
Any idea what may happen personal guarantees on such loans. E.g. Developer X with a NAMA portfolio spread over Ireland and the US and assume personal guarantee on US debt. Could it spoil NAMA’s softly-softly approach or force a developer friendly ‘waiver’ on loans sold on? If there’s a waiver it would probably lower the price achieved and how would NAMA justify this?
@Ahura M. There is no waiver on personal guarantees. They follow the loan and are part of the security for it. When the loan is gone NAMA has no call on the PGs. The loan acquirer has them – unless the PG documentation prevents the transfer of the guarantees. Which is course would not be the case, because if the PG documentation had such a clause they would never have transferred to NAMA in the first place.
So you think NAMA couldn’t change the T&Cs of loans being sold? IIRC Anglo changed the Maple 10s loans to non-recourse after a certain event.
They could – but it’s politically impossible. There would need to be a very good reason for them to do it….. It won’t happen. In principle, the guarantee travels with the loan.