Dáil Éireann Debate, Wednesday - 18 December 2013
68. 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; the position regarding the transfer of loans from IBRC to the National Asset 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. [54556/13]
View answerThe Special Liquidators are continuing the orderly and efficient wind-down of IBRC in accordance with the provisions of the IBRC Act 2013 and instructions that have been provided to the Special Liquidators by me under the IBRC Act 2013. I am advised that the Special Liquidators will comply with the timelines, 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 Special Liquidators have advised me that the valuation of the IBRC loan assets was completed by 30 November 2013. In arriving at the valuation of an IBRC loan asset, the independent advisors were 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. There is an obligation on the Special Liquidators to ensure that the assets of IBRC are sold at a price that is equal to or in excess of the independent valuations that have been obtained. Should a bid not be received that is in excess of the independent valuation obtained, the loan asset will be acquired by NAMA. No further discount will be applied to the loan asset in its transfer to NAMA.
The sales process plan and timeline has been developed following professional advice and in light of requirements of a robust and credible sales process. The Special Liquidators have also corresponded with all IBRC borrowers providing them 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. Consideration was given to Borrower representations and the Special Liquidators are in the process of responding to these Borrower representations.
The IBRC loan books have been divided into portfolios and subsequently subdivided into tranches depending on the professional advice obtained for ensuring that the maximum value is obtained for the sale of the Loan Assets. The sales process is currently underway across all portfolios/tranches and the Special Liquidators confirm that the sale of the IBRC assets will be completed by 31 December 2013 or as soon as practicable thereafter.
Last week we witnessed the successful conclusion of the bidding phase for the first portfolio of assets brought to the market by the Special Liquidators. Binding bids for the Evergreen portfolio consisting primarily of Irish corporate loans with a par value of c. €2.5 billion were received on Friday 6th December and the Special Liquidators expect that c.84% of the portfolio (by par value) will be sold to third parties at prices in excess of the independent valuations. The sales processes for the remaining portfolios in IBRC are on-going and are expected to be concluded in early 2014.
