The National Asset Management Agency is a complex undertaking which has acquired an exceptionally large loans portfolio. Unlike most businesses which aim to expand over time, NAMA begins life with a very large balance sheet and aims to shrink it over time. It must do so while obtaining the best achievable return for the State on the assets it has acquired.
This section describes the three broad phases of the Agency’s work. The first involves the acquisition of 11,500 land and development and associated loans from the five financial institutions. This is followed by intensive engagement with the debtors whose loans have been acquired in order to gain a detailed understanding of their businesses and to begin formulating a strategy for debt repayment. The final and longest phase involves working towards a series of debt reduction milestones culminating in full repayment of both debtor and NAMA borrowings by 2019.
Given the size of the overall portfolio being acquired, NAMA has had to acquire the loans in a series of batches or tranches, beginning with the loans of the 30 largest borrowers.
NAMA manages the largest 180 debtors (accounting for €61 billion in acquired nominal loan balances) directly and its engagement with them begins shortly after loan acquisition.
For most debtors, the business plan review process will culminate in an agreement with NAMA which revolves around a commitment to meet an agreed debt repayment schedule.