Dáil Éireann Debate, Wednesday - 18 September 2013
172. Deputy Clare Daly asked the Minister for Finance the reason individual homeowner mortgages were not disposed of at a discounted rate in the liquidation of Irish Bank Resolution Corporation, although other loans were. [37289/13]
View answerThe Special Liquidators are obligated to ensure that the assets of IBRC are sold at a price which maximises the overall return for its creditors including the State. As a result the Special Liquidators are currently in the process of devising and implementing a sales process in respect of these assets. I have been advised by the Special Liquidators that the valuation process is on- going and that the Special Liquidators are taking professional advice as to whether a loan should be sold individually or as part of a portfolio in order to ensure that the maximum value is obtained for that asset within the instructed timeframe.
The Special Liquidators have begun 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.
In arriving at the valuation of IBRC loan assets (including residential mortgage loan assets), the independent advisers have been advised to apply a discount rate of 4.5% in determining the present value of future cash flows of the asset in the case where a discounted cash flow valuation methodology is employed. Further, a discount of 2.32% will be applied to all loan asset valuations to take into account security and title issues associated with loan assets, to arrive at the Valuation Price.
Therefore I, as Minister for Finance, in my Instructions to the Special Liquidators have not differentiated between residential mortgages loan assets and other loan assets for valuation purposes.
The decision concerning how the loans will be packaged for sale and what bidders constitute qualifying bidders for the purposes of the sales process is to be made by the Special Liquidators.
