Thursday, 20 June 2013

Questions (81)

Michael McGrath

Question:

81. Deputy Michael McGrath asked the Minister for Finance if he will provide a detailed update on the special liquidation of Irish Bank Resolution Corporation including the steps that have been taken to date by the special liquidator; if he will confirm the position in relation to the transfer of loans from IBRC to the National Assets Management Agency; if any discount will be applied to the loans in their transfer to NAMA; and if he will make a statement on the matter. [29998/13]

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Written answers (Question to Finance)

The Special Liquidators are continuing the orderly and efficient wind-down of IBRC in accordance with the provisions of the IBRC Act and instructions that have been provided to the Special Liquidators by me under the IBRC Act 2013. I have been informed by the Special Liquidators that they will comply with the timelines set out by me, as Minister, namely that the valuation of IBRC's loan assets be completed by 30 November 2013 and that the sale of IBRC assets be completed by 31 December 2013, or as soon as practicable thereafter.

The valuation process is on-going and I have been advised that at this point the Special Liquidators have not finalised plans in relation to the sale of IBRC loans assets. The Special Liquidators are taking professional advice on the appropriate method of disposing of loan assets, and on the appropriate criteria for determining who should qualify to bid for loan assets. In arriving at the valuation of an IBRC loan asset, the independent advisors have been advised to apply a discount rate of 4.5% in determining the value of future cash flows of the asset. Further, a discount of 2.32% will be applied across all loan asset valuations to take into account security and title issues associated with loan assets, to arrive at the Valuation Price. Should a bid not be received by a qualified bidder that is equal to or in excess of the Valuation Price then the asset/portfolio will transfer to NAMA.

I have been advised by the Special Liquidators that they will be writing to all IBRC borrowers to update them on the sale of their IBRC Loans and Collateral Obligations. The Special Liquidators are also providing borrowers with an opportunity to make written representations on the method of disposal of their loans and the criteria for determining who may bid for loan assets.