THE first loans bound for the National Asset Management Agency (NAMA) may not be transferred until January, Finance Minister Brian Lenihan told the Dail Finance Committee yesterday.
It had originally been envisaged that NAMA would take over the top 50 developers' loans by Christmas, but this had fallen to 10 earlier this month, when NAMA's business plan was revealed.
"I appreciate that in the business plan the ambition is to start a sizeable part of the work by Christmas, which is now under two months away," Mr Lenihan said, as the NAMA bill continued its passage through committee stage. "But that time limit could slip into January at the rate things have been proceeding."
Mr Lenihan has suggested that pension funds could be the most appropriate investors in the special body, which will legally hold the €54bn in bank loans transferred to NAMA. Yesterday he said that "ideally" the new boss of NAMA would also become the chief executive of this body, known as the 'Master SPV' (Special Purpose Vehicle)
The interim chief executive, Brendan McDonagh, is seen as the most likely candidate. Mr Lenihan said the job may not be openly advertised, but whoever takes the post will work within the National Treasury Management Agency (NTMA), which will provide services to NAMA.
The news that the private sector will have a 51pc controlling interest in the Master SPV, which will sit at the centre of a web of 'baby' SPVs, has added to the political rows over NAMA.
The Government says the SPV is little more than a technicality, with NAMA having a veto on all decisions which could affect its interests, or those of the Government.
Mr Lenihan said that there were "important considerations of national advantage" in having SPV structures, so that the debts were "off balance sheet" for Ireland.
But Labour finance spokeswoman Joan Burton said NAMA would now be controlled by private interests. A similar scheme in France is majority-owned by the banks, but investment in the SPV by Irish banks, or by developer interests, would cause a major political row.
Government sources say they are confident that the €51m can be found from suitable investors. Because of the similarity of the SPV investment to a government bond, they believe that pension funds and similar savings institutions will be willing to subscribe.
Mr Lenihan said the banks will receive interest of 5pc to 7pc on the €2.7bn, which will be paid out only if NAMA makes a profit. The remaining loans will be paid for by bonds from the SPV, which pay an interest rate based on the main rate at which banks lend to each other in Europe -- currently 1.5pc -- but which will ultimately be bought back for cash when the process is complete.