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Mon 08 Aug 2010Anglo transfers more loans to Nama

Anglo Irish Bank has transferred a second batch of loans to the National Asset Management Agency (Nama) at a discount of 61 per cent, a source close to the bank said today.

Anglo, which was nationalised last year, will transfer roughly €7 billion this time, the source said.

Fears over the rising cost of bailing out the business lender has triggered a spike in Irish borrowing costs, with the premium investors demand to hold 10-year Irish Government bonds over German benchmarks up again today to 316 basis points from 314 bps on Friday.

Central Bank governor Patrick Honohan said last week that Anglo would end up costing the taxpayer up to €25 billion, or around 25 per cent of gross domestic product.

Anglo Irish sold its second batch of loans to Nama over the weekend, and an official statement on the sale is expected either later today or tomorrow.

Excluding the latest tranche from Anglo, Nama has bought property loans with a nominal value of €20.5 billion at around half the value they were written at, reflecting a collapse in the local property market and the sector's weak lending standards.

Anglo's first tranche of loans to Nama were discounted by 55 per cent.

Nama is expected to buy loans with a nominal value of €81 billion as part of efforts to purge Irish lenders of bad debts that have choked off credit and compounded a deep recession.

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