The IBRC loan facility deed and the floating charge which are included in external assets, are included in Ireland because the cash proceeds from the underlying asset sales will be repaid to NAMA by the joint Special Liquidators.

Group	NARL €'000	NAMA Group (excluding NARL) €'000	2013 NAMA Group €'000	2012 NAMA Group €'000
Interest on loans and receivables	201,291	1,058,032	1,259,323	1,221,862
Interest on acquired derivative financial instruments	-	50,422	50,422	84,526
Interest on cash and cash equivalents	250	12,879	13,129	23,792
Interest on available for sale financial assets	-	5,928	5,928	12,365
Interest on working capital loan to joint Special Liquidators	-	872	872	-
Total interest income	201,541	1,128,133	1,329,674	1,342,545
Fee income from borrowers	-	5,042	5,042	29,650
Fee income received on IBRC short term facility	-	-	-	14,628
Total interest and fee income	201,541	1,133,175	1,334,716	1,386,823

Interest income on loans and receivables is recognised in accordance with accounting policy 2.9.

Interest income on loans and receivables is calculated using the EIR method of accounting. This method seeks to recognise interest income at a constant rate over the life of the loan and will differ from actual cash received. This implies that in any given reporting period the amount of interest recognised will differ from the cash received. However, over the life of the loan, the total cash received in excess of the acquisition value of the loan will, following adjustment for any impairment losses, equal the interest income recognised. No interest income is recognised on the element of any loan balance which is considered to be impaired.

Of the €1.26 billion (2012: €1.22bn) in interest income on loans and receivables recognised in the period 1 January 2013 to 31 December 2013, €0.9 billion was realised by way of interest income and non-disposal cash receipts (2012: €1.1bn). Any difference between the EIR income recognised and the element realised in cash in any particular period is factored into NAMA's impairment process.

Interest income on acquired derivative financial instruments relates to interest received on derivatives acquired from Participating Institutions that were associated with loans acquired.

Interest on cash and cash equivalents comprises interest earned on cash, short-term deposits, exchequer notes and commercial paper held during the year.

Interest on available for sale assets comprises interest earned on short term government bonds held for liquidity purposes.

During 2013, under a Ministerial direction, NAMA and the joint Special Liquidators of IBRC entered into a loan facility, agreeing an external loan of €1bn between NAMA and the joint Special Liquidators of IBRC. The purpose of the facility was to provide the joint Special Liquidators with working capital and cash collateral required by the NTMA to post to derivative counterparties of IBRC. At the reporting date, the balance outstanding on this facility was €nil. Interest charged by NAMA on this loan was 1.4% per annum.

Fee income from borrowers that is an integral part of calculating the EIR or originating a loan is recognised as part of EIR as described in accounting policy 2.9. Fees earned by the Group that are not part of EIR are recognised immediately in profit or loss as fee income. Fee income recognised in the year includes arrangement fees and restructuring fees.

Fee income received on IBRC short term facility

On receipt of a Ministerial direction issued on 29 March 2012, the Board approved a short-term facility with IBRC. This facility was collateralised by an Irish Government bond. The €3.06bn facility was drawn on 3 April 2012 with a maximum maturity under the Ministerial direction of 90 days. The facility was provided at a margin of 135 basis points over the European Central Bank refinancing rate, resulting in an all-in rate of 2.35% for the duration of the facility. The short-term facility matured on 20 June 2012 with the Group being repaid in full.

Agency	2013 €'000	2012 €'000
Interest on loan to joint Special Liquidators	872	-
Interest income on cash	2	2
Total interest income	874	2