Saturday 10 December 2016

NAMA is now 'managing' €20.4bn of loans in arrears

Emmet Oliver Deputy Business Editor

Published 03/03/2011 | 05:00

Brendan McDonagh, chief executive of NAMA. Photo: Frank McGrath
Brendan McDonagh, chief executive of NAMA. Photo: Frank McGrath

Only one-in-four of NAMA's loans are performing, new figures show, with the agency trying to manage €20.4bn worth of loans now in arrears.

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The agency's latest quarterly report shows that almost 80pc of the non-performing loans are four months in arrears.

NAMA is now faced with either restructuring these loans or moving against developers through the courts.

Of the top 30 developers, NAMA has agreed (or is close to agreeing) memorandum of understandings with 12 developers and many other agreements are "well advanced''. The agency denies it will allow developers debt forgiveness, but admits once all assets of a developer are sold, there may be no further way to pursue the amounts owed.

During the period under review, the agency took legal action against developer Paddy Shovlin. It has also placed firms belonging to Bernard McNamara into receivership.

The figures show that in June NAMA had 71pc of its loans categorised as non-performing, but this has now risen to 75pc. In terms of the book value of the loans in question, they are worth €20.4bn, although NAMA only paid €7.7bn for these assets.

In the latest results which show the level of non-performing loans, NAMA says: "NAMA is addressing this issue in the course of the debtor business plan process.''

As NAMA negotiates with developers, the number of non-performing loans is likely to change. Normally in a loan restructuring the length of the maturity is altered and/or the interest rate is lowered. Another option is a write-off of debt. Interest can also be rolled up or accumulated.

During the period, NAMA advanced €126m to borrowers to complete projects and fund working capital during the quarter. "These advances were subject to individual credit assessment and were judged to protect and enhance the value of the NAMA portfolio,'' said the agency.

The agency confirmed last month it had approved €592m in working capital up to the middle of February. The names of the developers benefitting from the working capital have not been revealed.

"Currently we are focused on the next phase of our operations and actively managing out the loan portfolios which we have acquired,'' said chairman Frank Daly.

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