Dáil Éireann Debate, Thursday - 19 December 2013
81. Deputy Michelle Mulherin asked the Minister for Finance the intentions of the liquidator of Irish Bank Resolution Corporation regarding performing loans, that is, sale at discount or move to other banks; and if he will make a statement on the matter. [54783/13]
View answer95. Deputy Terence Flanagan asked the Minister for Finance the position regarding the sale of the Anglo Irish Bank loan bank book and the Irish Bank Resolution Corporate loan book; and if he will make a statement on the matter. [54952/13]
View answerI propose to take Questions Nos. 81 and 95 together.
The 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. The Special Liquidators have been tasked with obtaining an independent valuation of the loan assets of IBRC. The Special liquidators have appointed independent professional advisors who have employed standard valuation methodologies appropriate to each class of asset of IBRC to determine a valuation price. In arriving at the valuation 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. This process is the same for both performing and non-performing loans.
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.
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 have responded 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. There is no difference in the treatment of performing loans and non-performing loans. All loans are being valued and then sold.
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.€2.5bn 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.
