Donohoe hails ‘landmark’ announcement by Nama

Ireland’s bad bank unveils plan to redeem final tranche of senior debt later this month

 

Minister for Finance Paschal Donohoe has hailed the announcement by Nama that it is to redeem its final €500 million of senior debt three years ahead of schedule as a “landmark day” in Ireland’s financial history.

The agency announced plans to redeem the remaining €500 million of the €30.2 billion in government-backed bonds it used to pay for bad loans from banks later this month.

The final senior bond buyback will discharge taxpayers’ remaining liability relating to the agency, which was set up in 2009 at the height of the financial crisis.

“This is a remarkable achievement and a landmark day in Ireland’s recovery from the financial crisis, which every day we leave further behind,” Mr Donohoe said.

“The fact that Nama is currently forecasting a surplus of €3 billion, which will accrue to the State over the coming years, is a testament to the strength of our economy and the journey we have made,” he said, noting that he planned to harness the skills built up in the agency for the Government’s new house building agency.

In this week’s budget, Minister Donohoe announced plans for a new State-run lending vehicle - to be known as the Home Building Finance Ireland (HBFI) - to get builders on to sites.

The agency, which will receive an initial capital injection of €750 million from the Ireland Strategic Investment Fund (Isif), is expected to leverage the skills and expertise of Nama.

Nama chairman Frank Daly said the agency “remains firmly” on target to deliver a lifetime surplus for the State of €3 billion, after it repays €1.6 billion of junior debt to banks, due in March 2020 at the earliest.

“Since inception, the Nama board, mindful of the wider impact on the financial standing of Ireland, has unwaveringly focused on eliminating this senior debt,” he said.

“While this job is done, we still need to maximise the return on our remaining portfolio of close to €4 billion and we will continue to progress our [DUBLIN]Docklands and residential delivery.”