Nama sees little change in discount

The chairman of the National Asset Management Agency (Nama) said he doesn't expect the discount on the second tranche of loans…

The chairman of the National Asset Management Agency (Nama) said he doesn't expect the discount on the second tranche of loans transferring to the agency to change "enormously" from the first batch.

"The discount on the first tranche was 50 per cent," Frank Daly said today. "I don't expect it to change enormously. Until we get the loans across, we won't know the exact figure."

Speaking at the CPA Annual Conference in Kildare, Mr Daly said Nama will pursue developers for the full value of loans they owed to banks.

"Borrowers, as both I and Nama chief executive Brendan McDonagh have already said on a number of occasions, will continue to be liable for the debts that they have incurred," he said.

"Where appropriate, Nama may agree to debt rescheduling and loan restructuring in the case of borrowers which it believes to be viable within a three to five year timeframe but any borrower who expects the taxpayer to assume his or her debt burden clearly misunderstands what Nama is about."

He said the market could not absorb a large voume of property sales at the moment, and said the institution's best interest would be served by working with borrowers to enable them to recover their capacity to repay debts, where possible.

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Mr Daly said about €13 billion of loans will probably transfer to the agency from banks in the coming weeks.

The so-called bad bank will complete all transfers by February.

The institution has already begun to transfer toxic loans from the five participating institutions, taking the first tranche last month.

Nama has acquired loans with a face value of €15.3 billion from State-owned Anglo, Allied Irish Banks (AIB), Bank of Ireland, Irish Nationwide Building Society and EBS for €7.7 billion, representing an overall discount of 50 per cent on the first tranche of purchases.

This is higher than the 47 per cent discount estimated in March due to a discount of 55 per cent – higher than the 50 per cent estimated that month – on the first €9.3 billion in loans from Anglo.