I propose to take Questions Nos. 82 and 83 together.
The Deputy will be aware that Section 9 of the NAMA Act provides that NAMA is independent in the performance of its functions and that, under Section 10 of the Act, its primary objective is to obtain the best achievable financial return for the State from its acquired loan portfolio. The NAMA Board exercises its judgement as to how best to fulfil its Section 10 objective bearing in mind the particular facts and complexities associated with each decision with which it is faced.
I am advised by NAMA that the Project Tolka loan sale was a complex transaction comprising the loans of a number of major debtor connections and encompassing a total of 186 obligors. I am further advised that preparatory work in relation to the sale took at least two years and that NAMA considered a range of disposal options by reference to its Section 10 objective. The full cooperation of the debtors was key to achieving the maximum value of the portfolio given the complexities involved.
I am advised that this preparatory phase involved consideration of a range of options to maximise disposal proceeds including consideration of various approaches by potential purchasers which had been made directly to the major debtor connections to acquire some or all of their assets. The debtor connections extensively consulted with NAMA regarding options for the portfolio including identification of potential parties for inclusion on a panel of credible bidders in the event of a loan sale.
NAMA advise that sixteen potential acquirers were initially considered, seven of which were not included in the list of potential bidders based on advice from the loan sales adviser, Eastdil Secured, as to their appetite and suitability for a portfolio of this type. I am further advised that NAMA, acting on the advice of its loan sale adviser and legal advisers, and the debtor connections agreed a list of nine potential credible bidders based on a number of criteria including financial capacity, experience in purchasing and managing similar portfolios and their interest in investing in assets similar to the underlying secured assets in the Tolka portfolio.
I am advised that NAMA initiated a targeted marketing process for the sale of the portfolio based on the advice of its loan sales adviser that, by comparison with all other disposal options, such an approach would significantly enhance the proceeds generated for NAMA. NAMA is prohibited by law from disclosing confidential information in relation to debtors and their assets and is therefore constrained from disclosing the particular considerations which formed the basis for the adviser's recommendation that a targeted marketing process would maximise the State's return in this particular instance.
I am advised by NAMA that after the Project Tolka loan sale process commenced, bidders were precluded, under the terms of confidentiality agreements with NAMA, from contacting debtors without the written consent of NAMA or its loan sale adviser. I am advised that no such consent was sought.
I am advised that the loans sales adviser engaged with six of the potential credible bidders to ascertain their level of interest in bidding for the portfolio. Following this consultation, three potential bidders were selected based on their interest in the portfolio and on their willingness to meet NAMA's minimum reserve price for the portfolio. The minimum reserve price had been established by reference to up-to-date independent valuations of the underlying secured assets.
NAMA's adviser confirmed to NAMA that the short-listed panel of bidders was sufficient to ensure a competitive process and that the short-listed parties had sufficient funds to complete the transaction. I am advised that the process was predicated on the receipt of three competitive bids and would not have completed unless three such bids were received.
Finally, I am advised that a high level of competitive tension was generated throughout the sales process and that three bids were received on the advised bid date for the transaction. NAMA accepted the highest bid which exceeded its minimum reserve price and independent valuations for the portfolio.
