Wednesday 21 March 2018

Nama ahead of schedule as €952m in bonds repaid

NTMA's Treasury Building
NTMA's Treasury Building

Gretchen Friemann

The National Asset Management Agency (Nama) yesterday repaid €952m in bonds issued at the height of the financial crisis, virtually eliminating the risk taxpayers will be left on the hook when it shuts down.

Nama amassed a €30.2bn senior debt pile as part of its effort to rescue the banks and prevent the complete collapse of the nation's financial system, which had been left on the brink by the reckless lending practices of the boom era. This latest redemption leaves the agency's contingent liability to the State at just €500m, less than 2pc of its original level.

Nama CEO, Brendan McDonagh said the reduced debt burden was a "significant achievement". He added the agency remains on course to reduce the residual liability by the end of the year - three years ahead of schedule. The repaid money flows back to the institutions Nama was established to help, including Allied Irish Banks and Bank of Ireland, who were issued senior debt in lieu of non-performing loan books.

AIB holds the largest slice of the agency's outstanding senior debt with €360m of unredeemed notes, while BoI owns €90m and PTSB just €50m.

Nama's speedy redemption schedule reflects the performance of the assets acquired during the crisis. However the agency still has €1.6bn of subordinated paper, which is unlikely to be repaid until the initial target date of 2020. Mr McDonagh said the "elimination of the contingent liability is a significant achievement but it has also contributed to stabilising and reducing the funding cost of Ireland's debt."

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