Monday, January 17, 2011

Ireland's NAMA eyes 3 local property deals in Q1 | Reuters

DUBLIN | Thu Jan 13, 2011 1:38pm GMT


(Reuters) - Ireland's "bad bank" expects to sell three domestic commercial property assets with a value of around 200 million euros (167 million pounds) before the end of March, its chief executive said on Thursday.

Ireland's National Asset Management Agency (NAMA) was set up in 2009 to purge the domestic banking sector of risky commercial property loans.

Any commercial property sales in Ireland will be keenly awaited as investors seek a floor for a market that has been in freefall since 2008, plunging the country into crisis and forcing the government to seek an EU/IMF bailout last year.

"We'd be quite confident that we have two, but probably three major transactions that would be announced to the market by the end of Q1," Brendan McDonagh told reporters.

"It's important to get transactions going in the market," he said, adding that NAMA would not lose any money on the deals.

NAMA approved the sale of close to 2 billion euros of its property assets in 2010, which were largely UK-based deals.

NAMA has spent around 30 billion euros buying loans with a nominal value of 71 billion euros. The haircut of 58 percent has left gaping holes on banks' balance sheets and sent the national debt soaring.

NAMA will acquire a further 16 billion euros of loans from Allied Irish Banks (ALBK.I) and Bank of Ireland (BKIR.I) by the end of March as agreed under the bailout deal.

McDonagh said the Minister for Finance Brian Lenihan would decide what discount to apply to those loans.

Ireland's financial regulator and the police are looking into allegations that the country's banks provided false information about their loans to NAMA to try and cushion their losses.

McDonagh told a parliamentary committee on Thursday that he had met with the police but he said it was not up to NAMA to decide whether the banks had lied.

"I am not the person to determine whether the information they presented was correct or not, or the reason for it," he said, adding that NAMA had conducted a rigorous due diligence of the loans it had purchased.

"I believe that our cautious approach has been fully vindicated."

Ireland's two-largest lenders -- Bank of Ireland (BKIR.I) and Allied Irish Banks (ALBK.I) -- said in the autumn of 2009, before the legislation creating NAMA was enacted, that they expected to face a discount of less than 30 percent on their loans.

Bank of Ireland has since had a discount of 42 percent applied to its loans and AIB has had a discount of 54 percent.

McDonagh said if a discount of 30 percent had applied across the sector, NAMA would be deeply in the red.

"We would be already, day one, 20 billion euros under water," he said.

(Reporting by Carmel Crimmins; editing by Patrick Graham, Sharon Lindores)

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