Dáil Éireann Debate, Thursday - 21 July 2011
118 Deputy Michael McGrath asked the Minister for Finance if he believes the recent decision of the Supreme Court in the McKillen case will have any impact on the work of the National Asset Management Agency; and if he will make a statement on the matter. [22301/11]
View answerNAMA advises me that the case has no impact on the management of loans totalling €72.3 billion which have already been acquired by the Agency. NAMA has informed Mr. McKillen of its intention not to acquire loans totalling €1.4 billion advanced by participating institutions to him and to debtor entities associated with him.
In relation to the residual loans of other debtors which have not yet been acquired, NAMA has written to the debtors concerned, in accordance with the right to fair procedure as ruled by the Supreme Court, and has sought their views on the eligibility of their loans and on the potential impact that NAMA acquisition of the loans may have on their interests. I understand that the NAMA Board will review submissions made by debtors and will then make decisions on whether to acquire the loans.
119 Deputy Michael McGrath asked the Minister for Finance if he will provide information on the total nominal value of loans acquired by the National Asset Management Agency to date in 2011; the price which has been paid; the total number of borrowers involved, including details of the number being managed by NAMA directly and the number managed by the NAMA units within the respective institutions; the overall discount applied to loans acquired from each institution; and if he will confirm if there are any further expected loan transfers to NAMA [22302/11]
View answerIn addition to loans totalling €71.2 billion which were acquired by NAMA in 2010, the Agency informs me that it acquired an additional €1.1 billion in loans in early March 2011. The loans acquired in 2011 were acquired from one institution at an acquisition price of €440m, which is a discount of 60%.
The tranche included loans from a total of 116 debtors, of whom 38 are directly managed by NAMA.
The Agency may also acquire up to an additional €2.4 billion following an engagement process currently underway with debtors whose loans have not yet been acquired. This engagement is in line with the right to fair procedures as ruled by the Supreme Court.
120 Deputy Michael McGrath asked the Minister for Finance the number of business plans which have been submitted to the National Asset Management Agency in 2011; and the number which have been agreed by the agency [22303/11]
View answerNAMA informs me that to date, a total of 152 draft business plans have been received from the 179 major debtors whose debt will be directly managed by NAMA. In 74 of these cases, decisions have been made by NAMA and these have been communicated to the debtors. Another 78 debtor business plans are currently being reviewed. Debtor business plans are still awaited from the 27 other debtors whose affairs are also under the direct management of NAMA. Agreement has been reached in principle with 18 debtors and, in the case of another 27, enforcement proceedings are underway. In the case of the latter, receiver business plans, including plans for asset disposal, will be agreed between the receivers and NAMA.
In the case of debtors whose debt is being managed by participating institutions under delegated authority from NAMA, a fast-track business plan process is in place and those debtors are currently at various stages of engagement with the institutions about their business plans.
121 Deputy Michael McGrath asked the Minister for Finance if he will provide details of the number of cases in which the National Asset Management Agency has become the owner of the land and or property due to the non-performing nature of the loans [22304/11]
View answerI am informed by the National Asset Management Agency that it has not, to date, taken direct ownership of land and property. In cases where enforcement has been necessary, it has appointed, or approved the appointment of, receivers.
122 Deputy Michael McGrath asked the Minister for Finance if he will provide details of the percentage of loans acquired which are being repaid in full in line with the original loan agreement; the number which it regards as completely non-performing and any impact the level of non-performing loans is having on the National Asset Management Agency business plan [22305/11]
View answerThe National Asset Management Agency has estimated that, as at end-March 2011, 23% of loans (by nominal balances) were performing. These are loans which are not in arrears by reference to contractual cash payments or where the arrears are outstanding for less than 30 days. 77% of loans were at various stages of non-performance or were subject to enforcement action. In the case of 60% of loans, payments were in arrears for 120 days or more. The NAMA Business Plan envisaged a significant restructuring of debtor loans. This process has begun and the Agency advises that it will lead to a substantial shift in the performance profile of the loan book as debtor performance will be measured by reference to restructured loans.
123 Deputy Michael McGrath asked the Minister for Finance if the National Asset Management Agency intends to introduce greater transparency to its operations by publicly providing details of assets it intends to sell on the open market [22306/11]
View answerI am informed by the National Asset Management Agency that it will shortly be publishing, through its website, information provided to it by receivers and other insolvency professionals in relation to property which has been subject to enforcement in Ireland, Northern Ireland and Great Britain. This information will be updated on a regular basis.
124 Deputy Michael McGrath asked the Minister for Finance if he will provide details of the amount the National Asset Management Agency has lent to borrowers since its inception [22307/11]
View answerThe National Asset Management Agency informs me that between 1 March 2010 and 30 June 2011, the Agency approved €900 million in new money advances to debtors. These funds are for purposes of working capital and development capital to enable viable projects to be brought to completion.
125 Deputy Michael McGrath asked the Minister for Finance the number of unfinished residential developments in which the National Asset Management Agency has come into the ownership of vacant properties. [22308/11]
View answerI am informed that NAMA has not, to date, taken direct ownership of land and property. In cases where enforcement has been necessary, it has appointed, or approved the appointment of, receivers. While the Agency has not taken ownership of unfinished residential developments, it has recently announced that it will invest €3m to fund urgent construction and remedial work in a number of unfinished residential developments which are linked to loans acquired by it. The Deputy may also wish to note that the report of a Working Group set up by the Government to examine the issue and extent of unfinished estates in Ireland identified about 225 estates that were deemed to require immediate remedial attention. NAMA debtors have loans with an exposure to only 28 of thoseestates.
126 Deputy Michael McGrath asked the Minister for Finance the amount of professional fees broken down by type, which the National Asset Management Agency expects to incur between now and the end of 2011. [22309/11]
View answerBetween now and the end of 2011, NAMA expects to incur costs of €38 million as payment to 500 staff in participating institutions to carry out loan servicing on its behalf, in accordance with the provisions of Section 131 of the National Asset Management Agency Act 2009. The fee is applied on a cost recovery basis up to a limit of 10 basis points, and has been approved by the EU Commission under its State Aid rules and. It is expected that fees totalling €32 million will be paid for due diligence services, including legal, property valuation and loan valuation, in connection with the acquisition and valuation of NAMA's loan portfolio. It may be noted, however, that these costs are recovered from the participating institutions as a deduction on the acquisition price paid by NAMA.
Other expected costs of the order of €25 million include audit fees and fees payable to independent business reviewers to review debtor business plans.
127 Deputy Michael McGrath asked the Minister for Finance the outcome of the preliminary discussions held between the National Asset Management Agency, AIB and Bank of Ireland on the way the banks and the agency may be able to provide financial support to purchasers of residential properties linked to the agency or its debtors; if he will provide details of the agency’s plans to ensure that any prospective buyer is protected from the risk of negative equity in the future; and if he will provide an up to date statement on these plans. [22310/11]
View answerPreliminary meetings have taken place between NAMA and a number of financial institutions in relation to a residential mortgage initiative which is currently under consideration. The proposed initiative is being subjected to extensive analysis and further detailed discussions are scheduled to take place with the institutions over coming weeks. I am informed that NAMA intends to submit to me a detailed proposal in late September.
