NAMA submits plan to Lenihan on dealing with foreign lenders
NAMA, the toxic loans agency, has drawn up a plan on how it will deal with foreign lenders and their Irish assets and sent it for approval to Finance Minister Brian Lenihan.
The 'code of practice' will govern how NAMA deals with what are called "non-participating institutions'' like Ulster Bank, NIB, KBC, ACC and Bank of Scotland (Ireland).
The most difficult issue will be where NAMA is owed money by a developer along with a foreign bank. This is often the case where a developer has raised finance via a syndicated loan.
"NAMA and the non-participating institutions will explore the scope for adopting a common approach towards certain debtors where there is a common interest in doing so,'' said a spokesman yesterday.
When Mr Lenihan approves the code, it will be published on the NAMA website, he added.
The code must meet strict requirements laid down by the EU Commission. If NAMA wants to take over a piece of land from a developer, it must seek the agreement of other members of any loan syndicate. The EU Commission made this clear earlier this year when talking about NAMA's powers to have landed "vested''.
"NAMA will not use this power in the context of a syndicated loan without the agreement of the other syndicate members,'' said the commission.
In other cases, NAMA will have to get agreement from other mortgage holders before it takes over the security or parcel of land.
In consultations with the EU, NAMA planners accepted they would have to address these things in the code.
"The Irish authorities further commit to include a clause to this effect in the Code of Conduct relating to non-participating institutions,'' the EU pointed out.