independent

Friday 18 April 2014

NAMA's €1.5bn to banks means €4.75bn of debt now repaid

THE National Asset Management Agency (NAMA) has paid €1.5bn to banks as it continues to clear the €32bn of IOUs it used to cover the cost of acquiring property loans from the lenders.

The latest payout means NAMA has now cleared €4.75bn of the original bill, the bulk of the cash paid to banks including AIB, Bank of Ireland and Irish Bank Resolution Corp (IBRC), the former Anglo Irish Bank.

The banks will use the bulk of the funds to clear some of the €116bn they owe to the European Central Bank.

NAMA chairman Frank Daly said yesterday: "Following today's redemption and the prospect of a strong cash performance being sustained during the coming year, we are confident we will meet our target of repaying €7.5bn of senior bonds by the end of 2013."

That deadline was set in an agreement between the Government and the EU/ IMF team managing the bailout.

The latest payment is the fifth redemption of NAMA bonds since it was set up three years ago.

Under the original NAMA structure the agency 'borrowed' the €32bn from the banks when it used the IOUs to buy loans with a face value of €74bn. All €32bn has to be repaid to the banks during the 10-year life of the agency if it is to break even.

That is in addition to €299m of start-up loans made to NAMA by the Finance Minister that have already been repaid.

All of the debts are being repaid from the proceeds of property and loan sales, mainly overseas.

Other contributions come from rents on NAMA properties and, in some cases, from interest being paid on developer loans.

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