On 24th January 2013, we learned that NAMA was offering two large loan portfolios for sale – Project Aspen and Project Club – and on here, we exclusively revealed that the portfolios related to developers David Courtney and Eamon Duignan. Project Aspen is the bigger portfolio with €810m of David Courtney’s loans, and there was criticism from the market when NAMA decided to offer the portfolio without first carrying out a valuation for potential buyers, which would be usual. And in the case of Project Aspen, there was a view in the market that NAMA had failed to maximize the bid potential for the portfolio. James Wallace at CoStar wrote “NAMA has not provided prospective bidders with recent full, or even desktop valuations, to go with the Project Aspen “datatape”, which therefore means that bidders have to estimate a current valuation individually. Failure to supply this information is considered something of a false economy by NAMA, as imposing this additional extra due diligence on prospective bidders is, ultimately factored in as part of discounts tabled for the NPL which can result in a net lower offer.”
It now seems that either Starwood Capital or Pimco will win the portfolio, paying less than 25c in the euro or less than €200m in total.
On 21st February, 2013 Minister for Finance Michael Noonan responded to that criticism – that NAMA failed to value the portfolio pre-market – in the Dail and offered an unconvincing defence by saying “NAMA advises that methodology and strategies applied in the case of any given loan sale is determined after consultation and discussion with the appointed loans sale advisor. The approach adopted in any particular case will be determined by the ultimate objective of maximising sales proceeds”
Today we learn via the UK commercial property portal, CoStar that a reason for the delay in bringing the second portfolio Project Club – understood to be around €230-330m of loans relating to developer Eamon Duignan – to market has been the Agency has been valuing the portfolio! CoStar reports “unlike with Project Aspen, for which there were no recent valuations for the underlying properties initially provided to bidders, valuations have been sought for Project Club, which partially explains the delay in the release of the datatape to prospective bidders.”
At least it shows progress and ability to learn at NAMA, though we may be left wondering if we have lost out on millions on Project Aspen because of the approach adopted there.