Small-scale investors to face rigorous NAMA regime on disclosure
Smaller borrowers, not involved in the first three NAMA tranches, must give the agency information on their pensions, any directors' loans they have and any assets they sold or transferred over the past five years.
Smaller borrowers include a large number of professional people, many of them in the legal and medical professions, who often formed syndicates to invest in property opportunities.
NAMA, which is now taking loans below a €20m threshold after the IMF rescue package, has revised the "debtor business plan'' it requires borrowers to fill out.
The new plan must be filled out by borrowers with less than 20 loans in total. The new version was completed over 10 days ago and requires smaller borrowers to furnish a full list of assets and liabilities to the agency.
The borrower must tell NAMA of any loans that have been given to executives, directors and key employees. Details of any loans given to family and friends that are secured against the assets of the company must also be handed over.
The borrower must provide details on any asset transfers (including sale) over the last five years that benefited the ultimate owner of the business or their related parties. Details on pension funds owned "or managed'' for the borrower must be disclosed.
The agency is also trying to get a picture of the tax affairs of borrowers and wants information about any liabilities that may exist or arise when assets are sold off. If the borrower is currently being audited or investigated this must be disclosed, even if it's overseas.
Properties currently held in special purpose vehicles or offshore trusts must also be disclosed.
In a sign of the strains existing for most developers, no matter how small, NAMA is also seeking to built up a picture on how many creditors are pursuing a borrower.
In that context the agency wants details on current "creditor pressure'' and a commentary on the difficulties with each one.
Details on any insolvency proceedings that may be imminent must also be outlined and any existing judgements must also be passed on.
Like larger developers, the agency also wants details on all "unencumbered assets''; that is, assets not pledged to a bank. This includes shares, bonds, other securities, artwork, investment property and homes.
The smaller developers will be required to draw up a "debt repayment and asset value-maximisation strategy'', where they commit to sell certain assets by certain dates.
NAMA wants debt levels to come down substantially within a period of three to four years and is imposing "cash sweeps'' on borrowers.
This means cash from sales (and potentially rent) will automatically come to NAMA ahead of other creditors.