We found out last week that NAMA is now offering so-called “staple finance” or “vendor finance” to potential purchasers of its loans. This is in addition to the previous arrangement whereby such finance was only available to purchasers of property. Word on the street is, that, despite NAMA announcing a €2bn staple finance package in May 2012 – and that €2bn announcement came after NAMA first revealed its staple finance scheme in 2011 – precious few buyers have opted for NAMA finance because the associated asset, be it a loan or property, is too expensive.
Back in 2012, we were having a right old laugh at NAMA’s paltry success in selling property with staple finance, with the office building at One Warrington Place and a residence in south Dublin being the only two sales where staple finance was believed to have featured.
So, nearly two years after NAMA first announced it was offering staple finance, how many sales have been subject to such financing, and nearly a year after announcing a €2bn staple finance package, how much has in fact been advanced?
On Tuesday in the Dail, the Sinn Fein finance spokesperson Pearse Doherty asked the Minister for Finance Michael Noonan these questions. In a variation of “get lost, I’m not telling you”, Minister Noonan Zen-like responded “details sought by the Deputy relate to the commercial dealings of NAMA and publication or otherwise of this information is a matter for NAMA in the context of commercial objectives and in the context of how it can best meet those objectives” Now that’s a headscratcher but it really does boil down to “get lost, I’m not telling you”
Word on the street is that there are been very few sales with vendor finance, which begs the question why NAMA isn’t selling more property. Is it holding out for top-tier prices, so high that even cheap financing won’t tempt punters to bite?
The full parliamentary question and response are here:
Deputy Pearse Doherty: To ask the Minister for Finance if he will confirm the number of completed transactions where the National Asset Management Agency has provided so-called vendor finance; the total value of such finance provided and the total amount of such finance presently outstanding..
Minister for Finance, Michael Noonan: I am advised by NAMA that it envisages that it will make up to €2 billion in vendor finance available, mainly in Ireland, on commercial terms to purchasers of commercial properties securing its loans. The further details sought by the Deputy relate to the commercial dealings of NAMA and publication or otherwise of this information is a matter for NAMA in the context of commercial objectives and in the context of how it can best meet those objectives.