Anglo nears completion of its €8bn transfer to NAMA
Published 16/08/2010 | 05:00
Anglo Irish Bank continued the transfer of its second tranche of €8bn in loans to the National Asset Management Agency (NAMA) at the weekend -- and the Irish Independent understands the full amount could be with the agency by next weekend.
Four of the five participating institutions in NAMA -- Bank of Ireland, Allied Irish Banks, Irish Nationwide and EBS -- transferred €5.2bn worth of loans at an average discount of 48pc to NAMA last month.
Anglo had also been due to transfer loans at that time. It is believed the delay in transferring the Anglo loans was due to the amount of due diligence being undertaken on them and the scale of the loan book.
Last month it emerged that just one-quarter of the €15.3bn first tranche of loans transferred to NAMA was being repaid, despite the banks' assurances that 40pc were performing.
That meant that 75pc -- or €11.5bn worth -- of loans transferred to the toxic assets agency by financial institutions were no longer being actively repaid.
The extremely poor quality of the loans is understood to have been a disturbing surprise for NAMA bosses.
The weekend before last, about €1.4bn worth of Anglo's second tranche of loans were transferred to NAMA. It is believed the complete second tranche of loans will be transferred to the toxic bank by either next weekend or the weekend after at the latest.
Irish Nationwide took a 72pc haircut on the value of loans it transferred to NAMA in the second tranche, while AIB took a 48.5pc cut, Bank of Ireland 37.8pc and EBS 46pc.
Meanwhile, the National Treasury Management Agency is preparing tomorrow to auction up to €1.5bn in a 4pc bond that matures in 2014 and a 5pc bond that matures in 2020. Ireland's borrowing costs have been rising, and Central Bank Governor Patrick Honohan has described the spread between Irish and German 10-year bonds as "ridiculous".
The ECB has reportedly been buying into short-term Irish bonds in an effort to eliminate market volatility.