Key Financial Figures
By the end of 2011, a total of €74 billion in loans had been transferred to NAMA by the five participating institutions and €31.8 billion has been paid as consideration to the institutions, an overall discount of 57%. Table 1 summarises the position by institution:
|Loan balances transferred||20.4||34.1||9.9||0.9||8.7||74|
Distribution of largest debtors
Table 2 provides a breakdown of all debtorA borrower whose loans have been deemed eligible and have been transferred to the Group. The borrower is referred to by the Group as a debtor. A debtor connection is a group of loans that are connected to a debtor. connections by size of nominal debt exposure. It should be noted that many of the debtors are also indebted to financial institutions which are not part of the NAMA scheme.
|Nominal Debt||Number |
|Average nominal |
debt per connection
|Total nominal debt |
in this category
|In excess of €2,000m||3||2,758||8,275|
|Between €1,000m and €2,000m||9||1,549||13,945|
|Between €500m and €999m||17||674||11,454|
|Between €250m and €499m||34||347||11,796|
|Between €100m and €249m||82||152||12,496|
|Between €50m and €99m||99||68||6,752|
|Between €20m and €49m||226||32||7,180|
|Less than €20m||302||7||2,117|
Valuation of assets
Bank assets (loans and derivativeA derivative is a financial instrument that derives its value from an underlying item e.g. interest rates or currency, and can be used to manage risks associated with changes in the value of the underlying item. transactions) were acquired at an acquisition value which was determined in line with Part 5 of the NAMA Act and the Valuation Regulations which were made by the Minister and published on 5th March 2010. The reference valuation date for the valuation of all property assets was 30 November 2009.
The acquisition value of each bank asset is the long-term economic valueThe value as determined by NAMA in accordance with the NAMA Act that an asset can reasonably be expected to attain in a stable financial system when the crisis conditions prevailing at the time of the passing of the Act are ameliorated. of the loan (LEVL). Various factors are taken into account in the calculation of the LEVL, including the current market valueThe estimated amount for which a property would exchange between a willing buyer and seller in an arm’s-length transaction. of the securityIncludes (a) a Charge, (b) a guarantee, indemnity or Surety, (c) a right of set-off, (d) a debenture, (e) a bill of exchange, (f) a promissory note, (g) collateral, (h) any other means of securing—(i) the payment of a debt, or (ii) the discharge or performance of an obligation or liability, and (i) any other agreement or arrangement having a similar effect. (typically real estate but also including non real estate assets, such as shares), the LEV of property and the market value of the bank asset.
The Valuation Regulations require that NAMA applies an uplift adjustment factor ranging from 0% to 25% to the current market value of property to reflect its long-term economic value (LEV). This is defined in the Act as the value that (a) a property can reasonably be expected to attain in a stable financial system when the crisis conditions prevailing at the passing of the Act are ameliorated and (b) in which a future price or yield of the property is consistent with reasonable expectations having regard to its long-term historical average.
The weighted average Property LEV (LEVP) uplift factor applied to acquired loans was 8.2%.
The discounts applied to nominal loan balances to derive an acquisition price are determined for the most part by the current market value of property securing the loans and, to a lesser extent, by further discounts made to reflect legal difficulties such as the extent to which security can be enforced or deficiencies in title. Table 3 summarises aggregate data for all acquired loans for which the overall discount was 57%.
|A. Aggregate loan balances||74.2|
|B. Current market value of property securing the loans (CMVP)||32.4|
|C. Long-term economic value of property|
(incorporating 8.3% uplift)
|D. Current market value of loans||26.2|
|E. Long-term economic value of loans|
(LEVL – acquisition price)
|F. Loan uplift (E minus D)||5.6|
|G. Discount (A minus E)||42.4|
|H. Percentage discount (G/A)||57%|
|I. CMVP/LEVL (B/E)||102%|
Breakdown of property portfolio securing NAMA loans – by location and asset type
In terms of geographical location, the breakdown of property securing NAMA loans as at 31 December 2013 is set out in Figure A.
Figure A: Portfolio concentration by location
A detailed breakdown of NAMA secured property classified by asset type is provided in Figure B.
Figure B: Portfolio concentration by sector