NAMA, has it paid off any of the Bailout loan or does it keep money it recoups ?

Drumpot · 13-01-2012 12:32PM #1

I trust that there is a perfectly simply explanation to my question but there has been something bugging me for sometime now.

I dont know exactly how much NAMA (Ireland Inc) got to buy the bad loans off the banks (lets say €75bil for arguments sake), but why dont we know whether or not this figure is decreasing or increasing ?

By that I mean, if there was €75bil put aside for the bad loans surely we should be able to get a regular update of how much has been put into the banks v how much has been gotten back by NAMA. Even if we are only talking hundreds of millions, surely there are readily available figures to hand.

Of course our government has reason not to disclose this information, mainly because they wont want to keep reminding people the pain the banks have caused. That aside, is it also because the government are not paying back these loans as NAMA makes money, for fear that they may have to put more into the banks then initially thought ?

Hypothetical example -
-Initial loan €75 Billion all put into banks
- NAMA recoups €30Billion
- Banks need top up of €30billion so NAMA pumps returned funds into the banks

Publically the government can hint that they only needed a €75 bil bailout but they actually put over €105billion into the banks. Joe Public is no more aware of the travesty, banks get their money , Ireland Inc doesnt need another bailout (happy EU) so everybody but the taxpayer gets looked after.

Maybe Im just an old cynic, but can anybody explain why we dont know what exactly the costs of NAMA and net owed after the bailout is ?

Cuddlesworth · 13-01-2012 04:20PM

Drumpot wrote: »

Maybe Im just an old cynic, but can anybody explain why we dont know what exactly the costs of NAMA and net owed after the bailout is ?

Because Nama is essentially a commercial entity trying to recoup as much value as possible from the situation it has been placed in. It would be counter productive for it to publicly reveil how it intends to do this.

I will point out for the purposes of this forum that I work in a company that has extremely close ties to Nama but do not personally have any knowledge or access to any Nama information or operation.

Drumpot · 13-01-2012 04:43PM

Cuddlesworth wrote: »

Because Nama is essentially a commercial entity trying to recoup as much value as possible from the situation it has been placed in. It would be counter productive for it to publicly reveil how it intends to do this.

I will point out for the purposes of this forum that I work in a company that has extremely close ties to Nama but do not personally have any knowledge or access to any Nama information or operation.

I wasnt thinking what they were hoping they would recoup, more what they have actually recouped to date. They have sold off assets, I am just wondering what the return to date has been.

Cuddlesworth · 13-01-2012 04:50PM

Drumpot wrote: »

I wasnt thinking what they were hoping they would recoup, more what they have actually recouped to date. They have sold off assets, I am just wondering what the return to date has been.

What they have recouped and what they are hoping to recoup would be tightly linked. Releasing details of one, would undoubtedly endanger the other.

Drumpot · 13-01-2012 07:28PM

Cuddlesworth wrote: »

What they have recouped and what they are hoping to recoup would be tightly linked. Releasing details of one, would undoubtedly endanger the other.

I dont understand what you mean here. I would of thought that if people really wanted to know what assets are in NAMA and how much was paid for them or how much they are sold for, that alot of the information is available for public viewing ?

Again, using a hypothetical example to try to elaborate on my point-

If NAMA bought up 1000 loans for €75bil and have sold off 100 of them for €5 billion then the outstanding debt on the balance sheet would be €70billion. How would disclosing this publically effect what they would hope/expect to recoup ?

It doesnt matter what they expected to get in terms of just trying to work out how much of the €75billion is still remaining/utilised.

Now, if they have a kity of €75billion that they havent completely used and they are buying and selling on an ongoing basis, they could still let us know exactly how much is left.

While I understand why the government wouldnt want any figures regularly reviewed publically, I dont understand why any media source hasnt been keeping a track of whats being spent/recouped by NAMA as an ongoing concern.

That aside, dont NAMA regularly come out with some announcements with figures on properties they have sold ?

I am not saying I am right, just trying to understand your point. Are you suggesting that the sale price of assets could be effected if NAMA discloses their books ? If they owe €75bil for assets on their books, surely the less they have on the books and the less they owe, the more confident the market will be. I would of thought keeping things hidden would create more distrust and erratic prices while the market is artificially confused by NAMA assets.

Slydice · 13-01-2012 08:06PM

NAMA has not actually made enough profit on the money it has gotten back

It paid for the loans it got

Since then, house prices have continued to dive

From what I've read, NAMA property prices have to rise more than 25% from now until 2020 for them to even break even (i.e. not come out with a loss).

later12 · 13-01-2012 09:41PM

Drumpot wrote: »

I dont know exactly how much NAMA (Ireland Inc) got to buy the bad loans off the banks (lets say €75bil for arguments sake)

NAMA has issued bonds of approximately €28.7 billion in Government guaranteed debt by NAML, a subsidiary company of NAMA. NAML writes the cheques for the NAMA Investment company:

As you can see from this chart, what we call "NAMA" is merely a 49% shareholder in a company called NAMAI Ltd (although it does nevertheless dictate the company's strategy)

So you see, because we wanted (and acquired) private investment in NAMAI Ltd, the proceeds of the company cannot simply go to the state.

However, any profit that NAMA (the agency) makes in view of its shares in NAMAI Ltd will go to the NTMA.

Somewhat less palatably, about 95% of NAMA's stock of debt will pass on to the NTMA in the event of NAMA being a total flop, but that's for another day,and anyway NAMA is not going to be a total flop.

By that I mean, if there was €75bil put aside for the bad loans surely we should be able to get a regular update of how much has been put into the banks v how much has been gotten back by NAMA.

As explained above, it isn't quite that simple.

However we do know that NAMA the agency (that's the taxpayer-shareholder) made a loss of €300,000 for Quarter 1 2011.

Good loser · 14-01-2012 10:43PM

Drumpot wrote: »

I trust that there is a perfectly simply explanation to my question but there has been something bugging me for sometime now.

I dont know exactly how much NAMA (Ireland Inc) got to buy the bad loans off the banks (lets say €75bil for arguments sake), but why dont we know whether or not this figure is decreasing or increasing ?

By that I mean, if there was €75bil put aside for the bad loans surely we should be able to get a regular update of how much has been put into the banks v how much has been gotten back by NAMA. Even if we are only talking hundreds of millions, surely there are readily available figures to hand.

Of course our government has reason not to disclose this information, mainly because they wont want to keep reminding people the pain the banks have caused. That aside, is it also because the government are not paying back these loans as NAMA makes money, for fear that they may have to put more into the banks then initially thought ?

Hypothetical example -
-Initial loan €75 Billion all put into banks
- NAMA recoups €30Billion
- Banks need top up of €30billion so NAMA pumps returned funds into the banks

Publically the government can hint that they only needed a €75 bil bailout but they actually put over €105billion into the banks. Joe Public is no more aware of the travesty, banks get their money , Ireland Inc doesnt need another bailout (happy EU) so everybody but the taxpayer gets looked after.

Maybe Im just an old cynic, but can anybody explain why we dont know what exactly the costs of NAMA and net owed after the bailout is ?

From later 10's reply the total outlay by Nama was €28.9 bn (not €75 bn).

I'd say they're in a quandry, or several, in that the pressure is to get the money in quickly while the slower they are to sell their assets the more they are likely to realise, because of fewer rushed sales.

They seemed to be tough enough on the Grange site for Grehans. They were too slow for Durkans. It will be interesting to see how they get on with Treasury - probably the best of their big customers.

Drumpot · 16-01-2012 06:19PM

Good loser wrote: »

From later 10's reply the total outlay by Nama was €28.9 bn (not €75 bn).

I'd say they're in a quandry, or several, in that the pressure is to get the money in quickly while the slower they are to sell their assets the more they are likely to realise, because of fewer rushed sales.

They seemed to be tough enough on the Grange site for Grehans. They were too slow for Durkans. It will be interesting to see how they get on with Treasury - probably the best of their big customers.

Thanks Later10. .

I was only using the 75bil for a hypothetical example. NAMA is obviously more complicated then I assumed.

I thought that basicaly the bailout included xbilion that was given to NAMA to buyup all the bad debt. I then presumed that any property sold (I know that there have been properties sold), the funds would go back to NAMA and reduce the cost of the bailout (ala normal loan repayments).

I would imagine that if 51% of the funds of the bailout are private investors, they would get paid before the Government portion ? I thought our bailout was closer to 70bil, just a bit confused now . . Shouldnt of started this post, I understand NAMA even less then I already thought!!!!:(

Geuze · 16-01-2012 08:10PM

Drumpot wrote: »

I thought that basicaly the bailout included xbilion that was given to NAMA to buyup all the bad debt. I then presumed that any property sold (I know that there have been properties sold), the funds would go back to NAMA and reduce the cost of the bailout (ala normal loan repayments).

NAMA is complex.

NAMA is separate from the EU / IMF loans.

NAMA did buy a lot of bad loans from the banks, but did not pay for them in cash.

It does not have 25-35bn in cash to give to the banks to buy the non-performing loan assets.

So it paid using NAMA bonds, which are new assets on the banks balance sheets. NAMA pays interest to the banks on these bonds.

As NAMA manages / leases / sells off the loans or the properties behind the bad loans, it receives cash, yes.

It uses the cash to repay some of its NAMA bonds. So it eventually pays the banks for their bad loans.

NAMA, has it paid off any of the Bailout loan or does it keep money it recoups ?

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