1st Tranche (completed 10th May 2010)

The position at 6.00am on Monday 12th July 2010

It has come to our attention that NAMA has updated the tranche 1 summary on its website. NAMA’s documents on its homepage are shown in chronological order and NAMA originally issued its summary for tranche 1 on 30th March, 2010 at which point Anglo was “subject to audit”. NAMA finally produced a press release for Anglo on 10th May 2010 which showed the gross loans acquired and the net consideration paid. Unbeknownst to anyone, NAMA then went back to the 30th March 2010 document and changed the LEV and CMV for Anglo by about €2bn each and also the costs to be recharged to institutions. They deleted the original document and replaced it with a new document but chronologically it still appears in its 30th March 2010 slot. A curious action. Anyway here is the final summary for tranche 1.

Here is the position prior to the alteration of that document.

11th May, 2010 Simon Carswell at the Times contributes to the completion of the transfer of tranche 1 by saying that €700m of Anglo’s loans were not transferred as planned because of poor loan records or security. He says that tranche 2 (gross of €13bn) should be complete at the end of June 2010 – coincidentally when we should have the NAMA Business Plan.

10th May, 2010 NAMA issues a press release which states that it has now acquired the first tranche. It states that Anglo’s loans were transferred with a discount of 55% and that the overall discount for tranche 1 was 50%. It states that the total loans acquired was €15.3bn which is €0.7bn down from estimates as recent as last week. Anglo’s loans now total €9.3bn and not €10bn as previously stated/estimated.

5th May, 2010 NAMA issues vanilla press release about the Anglo first tranche, not adding anything to the RTE and Irish Times reports but at least placing the fact that the first part of the first tranche of Anglo loans has been transferred to NAMA. Elsewhere at the Leinster Society for Chartered Accountants in Ireland, NAMA Chairman Frank Daly said “Let me update you about progress on the acquisition of the first tranche of loans. We have acquired some €10 billion of the loans of the largest ten borrowers with AIB, Bank of Ireland, Irish Nationwide, EBS and Anglo Irish Bank. For these, the consideration paid was €4.85 billion, a discount of about 51%. That discount is unlikely to change very much after we have acquired the residual of the first tranche loans from Anglo. This will bring the total first tranche transfer to about €16 billion.” So the rest of Anglo’s first tranche with a gross value of €6bn might also be subject to a 51% discount? We should find out in the next few days.

3rd May, 2010 – Without citing sources, RTE reports that Anglo transferred €4bn gross loans in the last couple of days and that the remaining gross of €6bn from the first tranche will be transferred by next weekend. RTE says the first tranche is expected to be subject to a 55% discount though “data checks and exchange rate movement” may alter this. No official confirmation from NAMA yet. The Irish Times has the same story but quotes an unnamed NAMA spokesman.

1st May, 2010 – the Independent (which seems to have taken over from the Times in having access to confidential information from NAMA) today reports that Anglo’s first tranche will start moving this weekend and that the overall discount on the first tranche is likely to be 55% compared with the 50% estimate at the start of April, 2010. Nothing official from NAMA yet.

It was reported by the Sunday Tribune on 25th April 2010 that of the first four financial institutions to have transferred loans (BoI, AIB, INBS and EBS – Anglo is still outstanding) that only BoI’s numbers are not subject to dispute. It is also unclear whether the EU has approved the first tranche.

29th March 2010 – the first tranche cost NAMA €370m being €280m to INBS (for €670m of loans – 58% haircut) and €90m for EBS (for €140m of loan- 37% haircut). Unclear whether they have been approved by the Regulator/Ernst and Young and the EU/”investment bank” or if the valuation dispute procedure has been invoked. NAMA will pay BoI €1.26bn for the first tranche (for €1.93bn of loans – 35% haircut) by 2nd April 2010 and €1.88bn to AIB (€3.29bn of loans – 43% haircut) and €5bn to Anglo (for €10bn of loans – 50% haircut) by “early April 2010”. The dispute procedure allows NAMA to hand back assets to the value of any increased valuation and the Regulator/EU may impose a clawback reducing even further the payment yesterday of €370m. According to the INBS Annual Report and Accounts 2009 (page 9), the first tranche was transferred on 27th March, 2010.

NAMA confirmed on 6th April 2010 that they have completed the transfer of the first tranche from four of the five institutions – AIB, BoI, INBS and EBS – just waiting for Anglo which should be done “in the coming weeks”. AIB werepaid a total of €1.9bn for their first tranche loans, up marginally from the €1.88bn cited in last weeks press releases.

NAMA have issued a release dated 2nd April 2010 that the BoI first tranche has transferred. The release is dated 2nd April 2010 but has been retrieved from the NAMA website on 8th April 2010. The BoI first tranche transfer was in line with the Super-Tuesday announcements last week ie loans of €1.93bn and consideration of €1.26bn and “discount” of 35%.