Nama hits year-end debt redemption target

The National Asset Management Agency (Nama) signalled today it had redeemed a further €500 million in senior debt to hit its year-end redemption target of €7.5 billion.

The agency used €30.2 billion of bonds to buy most of its original portfolio of loans from the Irish banks in 2010 and 2011.

As part of an agreement with the troika, Nama had pledged to buy back the first €7.5 billion tranche of debt by the end of 2013.

A further €7.5 billion is due to be redeemed by 2016, with the residual expected to be cleared by 2020.

"Three years ago, the board decided that it would aim to reduce Nama's debt by 25 per cent by the end of 2013," Nama chairman Frank Daly said.

"We are very pleased that this first crucial milestone has now been met, despite the difficult market conditions that have prevailed in Ireland during the intervening period."

“The milestone attained is an important one, not only for Nama in terms of its own progress, but also because it reinforces the very positive international perception of Ireland as a country that is resolutely addressing its difficulties and meeting its targets,” he added.

Nama also announced yesterday it had redeemed a further €200 million in senior bonds issued to the Central Bank to cover "the floating charge" associated with the liquidation of Irish Bank Resolution Corporation (IBRC), formerly Anglo Irish Bank, in February earlier this year.

In total, Nama issued €12.9 billion in senior bonds to the Central Bank to cover the IBRC liquidation, and the latest redemption, coupled with the redemption of another €300 million of the bonds in October, means that the bonds in issue have been reduced to €12.4 billion.

Separately, it emerged today that the liquidators of IBRC plan to sell securities essentially offering investors the first chance to wager on the success of Nama.

The liquidators, KPMG in Dublin, hired Goodbody Stockbrokers to sell the failed lender's junior Nama bonds, according to sources.

The liquidators are preparing to sell €843 million of junior bonds IBRC received as part payment for loans it sold to Nama.

The junior securities only pay out if the agency beats its target of redeeming all its senior debt by 2020.

Goodbody is offering the bonds at a discount to nominal value, sources said. The bank valued them at 15 cents in the euro in June 2012. Both the liquidators and Goodbody declined to comment on the matter.

"With overall Irish residential and commercial property prices having returned to growth and UK property on the up, there is a chance investors eyeing these bonds may make a profit," said Investec economist Philip O'Sullivan, said. "Still, there are quite a lot of risks."

Additional reporting by Bloomberg