NAMA debtors expected to provide up to €500m in fresh security

The National Asset Management Agency (NAMA) expects it will be provided with up to €500 million in fresh security for its loans following negotiations with debtors, the Agency’s chairman said today.

Speaking at the annual dinner of the Dublin Chamber of Commerce, NAMA Chairman Frank Daly said the Agency had made good progress in obtaining charges over debtor assets that were previously unencumbered and reversing transfers of assets by debtors to family members.

“We expect that once this process is concluded, the aggregate value of these unpledged assets may prove to be in the region of €500 million”, said Mr Daly.

NAMA debtors have granted charges over unencumbered assets totalling €221 million so far; the Agency has also succeeded in reversing transfers of assets by debtors to family members and other connected parties totalling €160 million, giving an overall aggregate of €381m.

Update on NAMA activities

Mr Daly also said NAMA had made 6,000 individual credit decisions since March 2010 and that the turnaround time for credit decisions was on average less than 6 days.

The Agency has agreed more than 600 debtor business plans (representing 95% of its total loans); approved close to €1 billion in advances of working and development capital to debtors; and approved asset sales valued at more than €7 billion. NAMA has accumulated cash receipts of €6.2 billion by the end of 2011 and ended the year with €3.8 billion of liquid assets.

Mr Daly said NAMA recognised the role it must play as a catalyst for renewing sustainable activity in the Irish property market, through initiatives aimed at the residential and commercial property sectors. 

“Our ongoing engagement with potential investors suggests that there is growing overseas interest in acquiring Irish commercial assets, particularly prime office and retail properties in Dublin with good covenants and attractive yields”, he said.

He also provided further details on the Agency’s plans to generate cash from its portfolio by establishing an umbrella Qualifying Investor Fund (QIF) aimed at major institutional investors.

Mr Daly said NAMA also plans to acquire property assets, on an arm’s length basis, from receivers (or from debtors who cede secured property directly to NAMA) and will package them in various combinations which can then be monetised through sale to investors.

NAMA proposes to assemble sub-portfolios based on asset types (office, residential, retail etc) or geographical region (Ireland, Dublin, UK etc) which will be aligned to particular investor preferences. 

The Agency will also begin an active loan sales process shortly, following the recent establishment of sales advisory panels for Europe and the US. “Loan sales will enable us to monetise the loan portfolio and thereby reduce our balance sheet”, said Mr Daly.

Overall Mr Daly stated that NAMA is making strong progress despite the difficult economic conditions in Ireland and abroad.