Way being cleared for €2bn payment to exchequer from Nama

Final size of agency’s surplus could be hit by Covid-19 crisis

Private investors were brought into Nama via a special purpose vehicle which held a majority stake in an investment holding vehicle which was part of the agency structure. Photograph: Cyril Byrne

Private investors were brought into Nama via a special purpose vehicle which held a majority stake in an investment holding vehicle which was part of the agency structure. Photograph: Cyril Byrne

 

The way is being cleared for the payment of €2 billion from the National Asset Management Agency (Nama) to the exchequer, with the agency tying up agreements with private investors who have a stake in a holding company attached to the agency.

Private investors have been involved to allow the State to keep the activities of Nama off the State balance sheet.

With borrowing rising this year due to the Covid-19 crisis, the receipt of the Nama cash will be a welcome addition to the State’s cash resources.

Nama had been expected to have a final surplus of around €4 billion, of which half was to be available this year to the exchequer. However this was estimated before the Covid-19 crisis hit and the subsequent reduction in asset valuations could put this figure at risk.

Private investors were brought into Nama via a special purpose vehicle. It held a majority stake in an investment holding vehicle which was part of the agency structure. The investors, who put in €51 million, were paid a return based on the interest rate on 10-year Irish government debt. In total €14 million had been paid in dividends by 2018.

Largest shareholders

A 2018 Dáil reply by the Minister for Finance Paschal Donohoe listed funds administered on behalf of investors by New Ireland and BNY as the largest shareholders. Smaller holdings were held by the Representative Church Body, which holds assets on behalf of the Church of Ireland, the Church of Ireland Clergy Pension Fund and a UK company Nortrust Nominees.

These investors are entitled to a return of about 10 per cent, capped at €5 million, when the company is wound up. The process of managing their exit is likely to be completed in the next fortnight. Earlier this year Nama redeemed €1 billion in subordinated debt, another necessary step before the release of the surplus to the exchequer .