THE National Asset Management Agency (NAMA) is set to make its first cash payment to banks on March 1, redeeming €250m of bonds that were widely expected to be re-issued.
The toxic loans agency is believed to have notified the banks of the move in writing on Wednesday evening, before announcing it publicly yesterday morning.
The €250m is just a small portion of the €28.57bn in Nama bonds that mature in March, but banking sources say they had expected the entire pile to be "rolled over" or re-issued.
"It's a welcome surprise, put it that way," said one last night.
Banks had gotten the bonds in payment for the loans that they sold to Nama over the last year. The bonds were issued at different points in the year but all have a maturity of March 1.
"We're expecting the rest of them to be rolled over to another batch of one-year bonds," said one banking source.
The €250m is being paid from the money Nama has raised by encouraging developers to sell off assets so they can pay down their debts. Nama is also paying back €49m it got from the Minister for Finance in March.
A spokesman for Nama confirmed that the toxic loans agency still has about €1bn in cash "to hand", but he declined to guide on when more bonds would be redeemed.
"Clearly the agency will need cash going forward, so it will decide its attitude to repayments in light of the circumstances it finds at the time," he added.
The €250m will be a welcome boost to banks that are starved of liquidity and dependent on more than €150bn of central bank liquidity facilities.
In a statement, Nama chairman Frank Daly said the agency's ability to pay back cash "demonstrates the effectiveness of the Nama business model".
"This is a significant milestone for the agency and the participating institutions," he added.