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National Asset Management Agency

Dáil Éireann Debate, Thursday - 21 June 2012

Thursday, 21 June 2012

Ceisteanna (46, 47, 48, 49)

Michael McGrath

Ceist:

41 Deputy Michael McGrath asked the Minister for Finance if the National Asset Management Agency has agreed deals with debtors which involve a reduction or dilution in any form of any personal guarantee the debtors may have given in respect of their loans now held by NAMA; if he will provide details of the number and nature of such deals; and if he will make a statement on the matter. [30197/12]

Amharc ar fhreagra

Pearse Doherty

Ceist:

43 Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 226 of 12 June 2012 wherein he stated that debt forgiveness has not formed part of agreements entered into by the National Asset Management Agency with debtors, if he will confirm if NAMA has entered into agreements in which personal financial commitments and obligations by debtors have been reduced or waived as part of any agreement. [30225/12]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 41 and 43 together.

I am advised by NAMA that it did not pay any consideration to participating institutions for personal guarantees attached to acquired loans. This is because it did not consider that such guarantees had any residual value in the vast majority of cases as the amounts potentially recoverable were limited to the value of secured assets. The policy of the NAMA Board from the outset has been to pursue all personal guarantees to the greatest extent feasible where there is value to be obtained. I am advised by NAMA that, with respect to co-operative debtors who have made full disclosure of assets and liabilities, it may, on a case-by-case basis, consider the release of personal guarantees or personal recourse two years after the value of all assets have been realised. I am also advised that the NAMA Board has recently decided that it will review this issue again in the light of any revised personal insolvency regime that may be introduced following enactment of legislation by the Oireachtas.

Pearse Doherty

Ceist:

42 Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Questions Nos. 104 and 108 of 6 June, 2012 if he will set out in tabular form the value of property controlled by the National Asset Management Agency and its debtors in each of the 32 counties here. [30218/12]

Amharc ar fhreagra

I am advised by NAMA that the information sought is currently being collated and validated and that it is expected to be available for inclusion in the Agency's Annual Report which is due for publication in July.

Question No. 43 answered with Question No. 41.

Pearse Doherty

Ceist:

44 Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 215 of 12 June 2012, wherein he stated that the said National Asset Management Agency’s provisional impairment charge of €810 million was based on estimated future cash flows on individual loans including cash flow from the future disposal of assets, if he will set out the basis on which NAMA calculates the value of the future disposal of assets and in particular if NAMA makes any assumption on the recovery of property values. [30226/12]

Amharc ar fhreagra

I am informed by NAMA that its 2011 impairment assessment is based on a combination of a detailed cash flow forecasting exercise for all borrower connections which are considered individually significant (corresponding to debtors managed directly by NAMA) and a collective assessment for the rest of the loan portfolio. For all individually significant debtors, in accordance with International Financial Reporting Standards, an assessment is made in respect of all future cash flows expected from each individual debtor. This assessment represents a best estimate of the future cash flows reflecting the performance of the individual debtor and other known developments which could impact future cash flows including local economic conditions, the trading performance of the debtor and the value of the property collateral.

In assessing the cash flows for individual debtors, NAMA does not make general assumptions in respect of the recovery of property values. The value of the property collateral that will be recovered by NAMA is assessed individually by debtor and by asset. The value of the property collateral takes into consideration the November 2009 valuation carried out by an independent valuer as part of NAMA's due diligence process as well as subsequent developments in respect of the property which may have an impact on the value that expects to recover. To the extent that expected disposal proceeds are less than those indicated by the November 2009 valuation, the resultant shortfall is reflected within the overall impairment charge.

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