The Deputy will appreciate that NAMA's engagement with its debtors and any decisions it makes arising from that engagement are confidential matters for the NAMA Board in line with its statutory independent mandate.
The Deputy will be aware that NAMA owns and sells loans and not property. Separately, assets securing NAMA's loans are owned by the debtor or receiver. As such asset sales are performed by the debtor or receiver with NAMA's consent with the proceeds of such asset sales being used to repay the debtor's outstanding borrowings.
I am advised by NAMA that the vast majority of both loan sale transactions conducted by NAMA and asset sale transactions conducted by NAMA debtors or receivers have been openly marketed. Accordingly, consultation with debtors regarding the inclusion of potential bidders has not been a consideration.
I am further advised that loan sales are frequently initiated as a result of credible unsolicited approaches from interested potential purchasers (i.e. reverse inquiries) to NAMA or, on occasion, directly to NAMA debtors. However, if NAMA does not find an approach to be credible it will not pursue such interest as has been the case with many such reverse inquiries.
When assessing reverse inquiries, NAMA's key considerations are whether the proposed transaction maximises the financial return to NAMA and whether the interested party is a credible bidder. If NAMA believes that the transaction would maximise its return and that the party making the reverse inquiry has the financial capacity to purchase the portfolio, NAMA will prepare a formal assessment and following appropriate internal approvals, will seek to initiate a formal loan sales process. The party that made the initial reverse inquiry would typically be included as one of a pool of potential bidders which are given the opportunity to review the portfolio concerned and submit bids if they see fit to do so.
NAMA advise me that, to date, less than one third of the significant loans sales processes triggered by credible reverse inquiries have subsequently been purchased by the party which made the initial approach.
I am advised by NAMA that Project Tolka was unique in terms of the particular targeted marketing approach that was adopted and the level of consultation with the debtor connection as regards bidder selection. As I pointed out in my reply to Parliamentary Questions Nos. 82 and 83 of 13 April 2017, NAMA initiated a targeted marketing process for this portfolio based on the advice of its loan sales adviser, Eastdil Secured. This advice was that this approach would significantly enhance the sales proceeds generated for NAMA by comparison to all other disposal options.
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.
