Nama's 'biggest impediment' was ban on sales back to builders - McEnery

Not being allowed to sell loans back to the borrowers who originally took them out hamstrung Nama and hampered the recovery in house building, one of the agency's most senior figures has admitted.

And he explained how the 2013 liquidation of IBRC prompted Nama to accelerate sales.

In an exclusive interview with the Irish Independent, Brian McEnery, a Nama director as well as a partner at accountancy firm BDO Ireland, said Section 171 of the Nama Act was its "biggest impediment."

Under Section 172 Nama is barred from selling loans to debtors at anything other than full price, while other buyers can buy at market rates.

"I mean I have to say I can understand why the section was put in but it became our biggest impediment, we couldn't do the deal with the person," Mr McEnery said.

"So, to give you the example, if their par debt was a euro and say the value of the asset was 50 cent, we couldn't take 80 cents off them, couldn't do it."

With Nama effectively blocked from selling development land to the Irish construction sector, there were few options but to target US private equity firms, he said.

Criticism of Nama for failing to maintain housing supply ignores those factors, he said, as well as the fact that building wasn't part of the agency's original mandate. "Many of the builders and developers are the harshest critics of Nama and Section 172 is very much at the heart of that but that's the mandate we were given and I understand it," he added.

"Remember that the mandate of Nama was in the first instance to become a … effectively to realise the value of that assets which were being transferred into it. It wasn't necessarily to be a house builder," he argued.

The Limerick-based accountant also explained how the appointment of a special liquidator, and consequent flow of big loan sales, forced Nama to sell loans faster than anticipated to avoid missing capital as it flowed into Europe from the US.

"You'll remember there was special liquidator appointed to Anglo-Irish Bank and all of a sudden, he had a couple of billion of assets to get out into the market place.

"All of a sudden, we thought 'f**k, we're here with our billions and then he's here' and then we could see other deleveraging going on and we said, 'you know, we better be careful here'."

Read the interview in full