Nama to repay further €500m of State-backed senior bonds this week

THE NATIONAL Asset Management Agency will this week repay a further €500 million of senior bonds issued by the toxic loans agency to five financial institutions as payment for property loans.

This brings to €750 million the amount repaid by the agency on €28.9 billion of senior Nama bonds since the start of the year.

Frank Daly, the chairman of Nama, said the second repayment of the Government-backed senior bonds was significant as it was “further evidence of Nama doing what it was set up to do”.

This comprised “ensuring the repayment of loans by debtors, managing those debtors very carefully and using the proceeds to repay the bonds Nama issued to fund the whole project”, he said.

The agency has approved the sale of €3.3 billion worth of property assets since March 2010, the proceeds from which have been shared with non-Nama banks.

This money has helped the agency reduce its indebtedness on the senior Nama bonds.

AIB is the biggest beneficiary of this week’s €500 million repayment of Nama bonds. The bank will receive about €250 million from the agency. AIB received Anglo’s Nama bonds when it took control of that bank’s deposits earlier this year.

Nama said it has reduced its overall indebtedness by €1.049 billion over the past year, including €299 million advanced by the Minister for Finance to cover the agency’s start-up costs.

The agency is understood to be keen to demonstrate to the credit ratings agencies that it can produce sufficient cash flow to make regular bond repayments.

The National Treasury Management Agency, the Government’s debt manager, criticised Standard and Poor’s last August for treating Nama’s debt as a direct liability for the Government without considering the corresponding property loans in the agency as assets.

The five institutions – Anglo Irish Bank, AIB, Bank of Ireland, Irish Nationwide and EBS building society – were paid €30.5 billion in bonds for loans with a face value of €72.3 billion.

Some 95 per cent of the consideration was paid in senior bonds.