NAMA Bonds

The National Asset Management Agency paid for the loans it acquired from the five participating institutions by issuing Senior Debt securities to the value of 95% of the total consideration (€30.2 billion) and Subordinated Debt securities for the remaining 5% (€1.593 billion).

In the case of the latter, payment of interest and ultimate redemption is subject to NAMA’s financial performance.

The following table summarises the total consideration paid to each of the five participating institutions for the loans NAMA acquired. The senior debt element of this consideration (€30.2 billion) has been fully repaid since October 2017.

Table 1: Loan acquisitions from participating institutions at end 2011
  AIBAngloBOIEBSINBSTotal
Loan balances transferred20.434.19.90.98.774
Consideration paid9.013.45.60.43.431.8
Discount56%61%43%57%61%57%

All securities are issued in Euro. The main features of the Senior and Subordinated debt securities are described in more detail below.

NAMA Senior Debt

NAMA senior debt instruments were unsecured floating rate Notes ranking pari passu with NAMA’s other unsecured and unsubordinated indebtedness. However, the principal and interest on the Notes was unconditionally and irrevocably guaranteed by the Minister for Finance.

In line with its stated objectives, NAMA sought to accelerate the redemption of its senior debt. In October 2017, the final senior debt redemption was completed, three years ahead of schedule. The following graph shows acutal redemptions versus the original target redemptions.

In accordance with Section 50(4) of the NAMA Act 2009, the aggregate of the principal of all senior debt issued shall not exceed €51.3 billion. The interest rate (coupon) is six-month Euribor.

NAMA Senior debt instruments are unsecured floating rate Notes ranking pari passu with NAMA’s other unsecured and unsubordinated indebtedness. However, the principal and interest on the Notes is unconditionally and irrevocably guaranteed by the Minister for Finance.

In accordance with Section 50(4) of the NAMA Act 2009, the aggregate of the principal of all senior debt issued shall not exceed €51.3 billion. The interest rate (coupon) is six-month Euribor.

NAMA Subordinated Debt

NAMA has issued Callable Perpetual Subordinated Fixed Rate Bonds to the participating institutions. Some of the features include:

  • On each Interest Payment Date commencing on 1 March 2011, NAMA may declare the interest payable if its Board deems it appropriate to do so in the context of NAMA meeting its objectives. Interest not declared in any year will not accumulate.
  • The interest rate is the 10-year Irish Government Bond rate on the day of first issue plus a margin of 0.75% i.e. 5.264%
  • NAMA has the right, but not the obligation, to redeem the subordinated bonds on 1 March 2020 or on 1 March annually thereafter.
  • Bonds may be redeemed in full at par without undeclared interest but this is subject to the financial performance of the NAMA in its totality.
  • On 3 April 2018, NAMA invited holders of its subordinated debt to tender terms at which they were prepared to sell some or all of their holdings to NAMA.
  • Subject to price, NAMA may redeem additional amounts of subordinated debt before the first call date of 1 March 2020.

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