Dáil Éireann Debate, Wednesday - 28 April 2010
47 Deputy Joanna Tuffy asked the Minister for Finance the number of National Asset Management Agency bonds that have been issued to date; the terms and the maturity; the proportion of these NAMA bonds that are subordinated; the number of NAMA bonds that are envisaged for issue by year end and in total; and if he will make a statement on the matter. [17226/10]
View answerIn accordance with the NAMA legislation, 95% of the total acquisition value of the acquired portfolio of each participating institution will be in the form of Government guaranteed bonds and 5% will be in the form of subordinated bonds. The interest rate on the Government guaranteed bonds is the six-month EURIBOR, as reset on 1 March and 1 September of each year. The value of the total bond securities issued to date by NAMA is €3.538 billion of which €3.361 billion, or 95%, is Government guaranteed bonds and €177 million, or 5%, is subordinated bonds. That information is available on the NAMA website. On the basis of the assessment of applications from the five participating institutions, loans worth approximately €80 billion have been identified as eligible for transfer to NAMA. The consideration to be paid for these loans will depend on valuations, determined by the application of the valuation methodology approved by the EU Commission, of each of the eligible loans. Furthermore, section 50 of the NAMA legislation places a limit of €54 billion on the consideration to be paid for the loans regardless of the nominal amounts involved. This limit can be amended only by a positive resolution by the Dáil. I have no intention of adjusting this figure at this time.
The figure mentioned — €3.538 billion — is quite a small amount of transfers, in the context of the draft business plan the Minister presented to the Dáil at the time of the NAMA legislation. According to the Minister's plan, more than half of all the loans should have been dealt with by now, as we come into May. However, just a tiny proportion of them have been dealt with. What is the reason for the delay? How many Anglo Irish Bank loans are included in the €3.538 billion figure? How much of Anglo Irish Bank does it represent? To what extent has the long-term economic valuation been used? Has a new NAMA business plan been drawn up yet? If so, has it gone to the board or to the Minister? If not, where is it? How can one deal with €80 billion of loans and up to €55 billion of NAMA bonds without having a business plan? It does not seem to make sense.
The Deputy will be delighted to learn that none of her supplementary questions was anticipated. I refer to her question on the extent to which the economic value was taken into account in the assessment of the total value, for example. I will have to forward some of the information she sought to her at a later date. The business plan is a matter for the board of NAMA, which is responsible for its preparation. There was an interim plan, but it was revised.
That was the Minister's plan.
It required revision in light of the subsequent valuations.
It was off the rails.
I am sorry, but it was not my plan.
The Minister brought it in here.
Yes, but it was prepared by the interim chief executive of NAMA at the time. I did not interfere in the formulation of the plan.
The Minister presented it to the House as his plan.
I laid it before the House to help, assist and inform Members and to show that NAMA's work in progress was advanced. I certainly did not present it as a plan of my Department or of myself. It was prepared by the interim chief executive of NAMA on that basis, for the assistance of the House.
Is the Minister disowning NAMA now?
No, I am not disowning NAMA. I am simply explaining the basis on which I presented the document to the House. The Deputy has misrepresented the basis on which I handed the document into the House. I understand the board is engaged in the preparation of a revised business plan, to be published in June.
The Minister is contradicting himself regarding the draft business plan. He said earlier that Ministers are there to make decisions on the basis of the advice provided. He took a plan that was provided and presented it as Government policy. That plan was based on figures that were provided by the banks but were not examined by the Department in any way. When will the business plan be forthcoming? Will the Minister stand over that plan? Will he present it as a plan produced by someone else? What will be the eventual haircut in Anglo Irish Bank? We are hearing various reports of 50%, etc. What will be the eventual haircut? What does the Minister expect will be the final amount of NAMA bonds and subordinated bonds to be issued in respect of the whole NAMA process?
The valuation to date involves a discount of 47%, on an industry-wide basis. We should be aware that the figures vary between different institutions. We have a duty in this House to stop talking about the banks collectively, and to start talking about particular banks.
Is the Minister referring to Anglo Irish Bank?
I am not lecturing the Deputy or Deputy Burton.
I just want the question answered.
Allow the Minister to reply.
She is very scrupulous in that regard. There is still a tendency in that regard. On the question of the business plan, I understand from the board, which is responsible for the operation of NAMA, that it will approve a business plan by June of this year.
June?
June?
I mentioned that to the Deputy a moment ago.
We were expecting it at the end of May.
On the question of the total amount, it is clear it will be substantially less than the statutory limit of €54 billion, but I am not in a position to say until the valuation methodology is complete. The best estimate which can be given at this stage is that the final valuation will be broadly in line with the initial valuation of the initial tranche.
The Minister referred to the haircut for Anglo Irish Bank.
No final estimate can be given until the bottom-up valuation is done. What was the Deputy's question on Anglo Irish Bank?
What eventual haircut on the first tranche does the Minister expect? It still has not gone into NAMA.
Allow the Minister to reply.
As I understood it, a figure of 53% was the latest stage it had reached.
The Minister obviously has more up-to-date information.
Again, that figure remains to be finalised.
We can have one final question.
It is getting worse. It was 28%
Please, Deputy. Allow me to call the Deputy.
Can the Minister supply the information to us?
The Deputy will allow me to call her without shouting people down.
There are a lot of personal guarantees there.
Can the Minister undertake to supply to us in writing, as soon as possible, with the breakdown of the transfers which have taken place for each of the covered institutions, the amount of the discount to date and the total amounts? Everybody in the country is stunned by what has happened regarding Irish Nationwide, Mr. Fingleton's institution. As with Anglo Irish Bank, we would like the figures for it.
The Minister can make a final brief reply.
I will arrange for NAMA to forward the information to the Deputy. It is information which she should have at her disposal. On Irish Nationwide, there was a particular problem, namely, the failure to take security out on particular assets.
