BoI, EBS and Nationwide developer loans first to be transferred
Some lenders yesterday received their first notification of loans the National Asset Management Agency (NAMA) plans to take over relating to the country's top property developers.
It is now a year since it emerged that economist Peter Bacon had recommended to the Government in a report that it set up a "bad bank", rather than an asset protection scheme, to deal with risky property loans in the banking system.
It is expected that Bank of Ireland, EBS Building Society and Irish Nationwide will have received so-called acquisition schedules for loans linked to the biggest five developers by this evening.
This will pave the way for the first physical loan transfers next Friday, according to sources familiar with the process.
Officials in NAMA are looking to issue schedules to Anglo Irish Bank and Allied Irish Banks, the two biggest participants in the "bad bank" scheme, early next week.
The schedules will indicate what assets NAMA will be taking over and, critically, the discount it has applied to them.
However, the notification will remain in draft format -- and subject to minor negotiations -- until the loans are actually moved across.
Sources said the fact that the schedules are drafts ensures that the two publicly quoted banks are not in possession, in the meantime, of definitive market-moving information that they would announce to the stock exchange.
NAMA is expected to issue a statement at the end of the first batch of transfers stating how much it has paid the banks for the loans by way of government-backed bonds.
AIB and BoI will be obliged then to issue market statements outlining how big their discounts were, and possibly give investors guidance as to what their overall haircuts will be.
The Government has so far stuck to the line that the industry-average discount will come to 30pc, but the growing expectation in the market is that it will hit 35pc.