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Posts tagged ‘Business plan’

Frank Daily Reveals some of NAMA’s secrets

Saturday, I had the time to listen The Marian Finucane talk showon RTE 1
Marian was talking to the NAMA chairman Frank Daily Listen here to show .What I
found most surprising was after nearly 15 months NAMA still has to approve one
business plan and even this one “was close to finality” This is surprising to
say the least Then we heard that NANA wrote to the Government last year about
Upward Only Rents and leases, to highlight the effects any change would have on
NAMA,(presumably negative). Anyway listen and learn here
NAMA chairman Frank Daily



Nama appoints receiver to Mansfield assets

Wednesday, April 20, 2011 – 05:28 PM
NAMA has this evening appointed a receiver to assets owned by developer Jim Mansfield.

Kieran Wallace of KPMG will assume control of the assets including Weston Aerodrome in Dublin, Palmerstown House golf club in Kildare, and a number of apartment blocks attached to the Citywest Golf club in Dublin.

71-year-old Mansfield had failed to agree a suitable business plan with NAMA to pay-down his debts.

Last year, Bank of Scotland Ireland appointed a receiver to Mansfield’s City West Hotel.

Read more: http://www.examiner.ie/breakingnews/ireland/nama-appoints-receiver-to-mansfield-assets-502113.html#ixzz1KBCeXzDe

NAMA under Fine Gael: drastic changes expected

By namawinelake 

“A terrible noise exactly like thunder was heard in the outer room of his apartments : it was the crowd of courtiers deserting the antechamber of the dead sovereign to come and greet the new power of Louis XVI”
This was the account given by Marie Antoinette’s chambermaid of the immediate aftermath of the death of Louis XV – all the courtiers and hangers-on were making a mad dash from one end of the palace where the king had just expired to the other end to ingratiate themselves with the successor. And whilst I wouldn’t want to pre-judge the outcome of the voting count today, I would be shocked if anyone other than Enda Kenny was to be our next Taoiseach and Michael Noonan the next Minister for Finance. And I would say the ingratiating started many months back.
Of interest here is the fact that the FG director of elections for Limerick (Michael Noonan’s constituency) is none other than insolvency expert Brian McEnery of Horwath Bastow Charleton . Brian also happens to be one of NAMA’s nine board members and I would imagine that Michael Noonan is very well briefed indeed on the challenges facing the agency. And it will be the Department of Finance that has most political say in how NAMA operates in future, though other ministries like the Department of the Environment Housing and Local Government and Justice and Law Reform will also have a role to play.
So what changes can we expect at NAMA:
(1) Personnel. NAMA is probably most associated with its chairman Frank Daly and CEO Brendan McDonagh. Sections 22 and 40 of the NAMA Act provides the Minister for Finance with wide discretion as to the bases for removing the incumbent NAMA CEO and other board members including the chairman. Will FG want a change of personnel. Have some already ingratiated themselves to the new administration and convinced the putative Minister for Finance that a different set of hands would do a better job? There are certainly rumours in this area.
(2) Stopping NAMA 2: “We do not believe that transferring the land and development loans of Irish banks of less than €20 million to NAMA is in the best interests of the Irish economy” FG has said that it will stop the transfer of the sub-€20m exposures from AIB and Bank of Ireland to the agency. What that immediately means is that the stress tests presently ongoing will need examine the values of some €12bn of sub-€20m loans.
(3) Outsourcing: “We will force NAMA to outsource management of at least 70% of its assets to 3-4 competing private asset management companies” FG is keen to get third party asset management companies to take on NAMA’s loans. Indeed a long-held concern on here is that NAMA with 100 staff is ill-equipped to directly handle 175 developers (which might represent 5,000 development companies and 20,000 projects) and their €50bn of loans at par value. On top of this NAMA must manage the banks and Capita with their dealings for smaller value loans. Capita has a long and coloured history of ingratiating itself with parties in power.
(4) NAMA strategy: remember it boils down to the six actions (sell, lease, manage, develop, demolish, mothball). It seems there is a clamour for NAMA to generate more sales. These are likely to be in the UK and elsewhere abroad though NAMA needs to be careful about opportunists who expect a “NAMA knock-down”. But I expect there will be more sales here and given the condition of the market, I expect sales at levels not seen before, bargains some might say but that would be to ignore the distressed condition of the existing market which is being artificially distorted without true price discovery.
(5) Transparency: “The details of all non-performing loans acquired by NAMA will be available for scrutiny on a Public Register”
(6) Paddy McKillen’s loans: NAMA was supposed to have made a decision whether or not to proceed to acquire Paddy’s loans last Wednesday. And we are still waiting for the Supreme Court to issue its determination on the three outstanding strands to Paddy’s appeal (to do with the fairness and constitutionality of NAMA and its procedures). Will Michael Noonan decide that Paddy’s loans will destroy value at the banks if transferred? Will he persuade NAMA to release its grip on Paddy’s and other objectors’ loans?
(7) NAMA report and accounts for quarter three, 2010 which were delivered to outgoing Minister for Finance, Brian Lenihan on 31st December, 2010. Will Michael Noonan now ensure they are promptly published?
(8) Dismantling upward-only rent reviews in commercial leases. This manifesto commitment is really rattling the property industry that sees 20% declines in commercial property values and a repulsion of investors fearful of those declines. At the extreme on the other hand, certain retailers and other commercial tenants are literally praying it happens quickly because with existing rent levels their businesses will die. Whatever FG does, it needs to do it decisively and clearly. Otherwise this uncertainty of this Sword of Damocles will hurt the property industry and do nothing for commercial tenants.
Of course the bigger challenge facing the new Minister for Finance will be dealing with the national debt burden including a renegotiation of the IMF/EU bailout deal, the restructure of the banking sector and dealing with the results of the stress tests ongoing at the banks. But I would expect the Minister’s fingerprints to become transparent on the operation of NAMA within days.

Source: URL: http://wp.me/pNlCf-15X

Simon Kelly, developer has offered to pay back €100 a month to lender ACC Bank.

By Esther Hayden and Dearbhail McDonald

Thursday February 03 2011

THE son of property tycoon Paddy Kelly has fallen behind on his mortgage payments and cannot repay a €17m debt he owes.

Simon Kelly, developer, columnist and author of the memoir ‘Breakfast with Anglo’, has offered to pay back €100 a month to lender ACC Bank.

But the developer, whose soured property loans of some €200m have been taken over by NAMA, says that it is “very difficult” on his annual income of €80,000 a year to make a meaningful difference to the €17m he owes to ACC.

Mr Kelly claims he has an annual income of €80,000 but is receiving no income from NAMA despite submitting a business plan to the bad bank.

Mr Kelly told Wicklow District Court last week some of his income came from Red Quartz, the family’s property investment vehicle; while some came from a management company he was involved in.

ACC Bank had sought an instalment order against Simon Kelly, of the Old Rectory, Dunganstown, Co Wicklow. Mr Kelly owes them €17,163,913.44 following two High Court judgments — one on May 28, 2009, and another on April 27, 2010.

The court heard “no payments had been received”.

Mr Kelly, who lives with his wife and five children in an old rectory set in five acres, told Wicklow District Court he was getting no income from NAMA.

Because of the commercial sensitivities of his dealings with NAMA, Mr Kelly applied to Judge Murrough Connellan to have the ACC application heard in private, but the judge refused.

NAMA refused to discuss Mr Kelly’s dealings with it, but a spokesperson said it “does not and will not” provide incomes to debtors.

Under cross-examination by ACC barrister Rossa Fanning, Mr Kelly said he had a credit card with Bank of Ireland and had an AIB bank account used for rent collection for five properties he had in Liverpool.

Mr Kelly said the business plan he submitted to NAMA “included an income for me”, but he said he was “in limbo” and had no idea if it would be approved.

He said he had outgoings of €120,000 per year. The court heard Mr Kelly has five children and he pays school fees of €27,000 per year.

Mr Fanning queried why Mr Kelly was not making any “provisions for payments of debts” and Mr Kelly said the €17m loan was “not my only debt”.

He said he was in arrears with his home loan.

Following a break to examine Mr Kelly’s statement of means, Judge Connellan made no order due to “lack of funds”.

– Esther Hayden and Dearbhail McDonald

Irish Independent

source; www.Inedpendent.ie

Is it right that the State must pay 5.8% on bailout funds whilst NAMA is lending billions to developers at 3%?

NAMA SPV structure

Image via Wikipedia

By namawinelake

Whilst Minister for Finance, Brian Lenihan continues to exhibit signs of schizophrenia with his stance on the cost of our bailout funds from the EU/IMF (5.8-6%), telling Opposition politicians only last week that it was not possible to renegotiate the interest rate of the EU element and then later claiming that it was possible, there is seemingly a scandal going unnoticed with NAMA developers being advanced funds at rates significantly below the rate that we, the nation, must bear.
Last Friday, Britain’s Property Week reported that Paddy McKillen’s Maybourne Group had been given an extension of two years to repay GBP £660m (€784m). The loan was reportedly due to be repaid by the end of last year and indeed it seemed as if the second part of last year was one long scramble by Maybourne to find a financing partner – Deutsche Bank, Westbrook Partners, Northwood were all reported to have had talks with the luxury hotels group about refinancing the loans that were due for redemption to banks which include Bank of Ireland and Anglo Irish Banks. If the Property Week story is correct then it was NAMA that recently green-lighted the extension of the loan for two years.
This is on some levels a curious development as Paddy McKillen has been locked in a bitter legal dispute with NAMA for the past six months – a dispute which Paddy comprehensively lost in Dublin’s High Court but which is presently awaiting the outcome of an appeal to the Supreme Court which was held before Christmas. The curiosity is that Paddy seems to be dependent on the grace of an organisation which he is litigating against. It seems that NAMA has not yet absorbed Paddy’s loans pending the outcome of the Supreme Court appeal.
What was not disclosed by Property Week was the interest rate payable by Paddy on the GBP £660m of borrowings. However NAMA CEO Brendan McDonagh has previously stated (“those loans would typically be priced at a six month EURIBOR rate plus a margin, typically 2% approximately”) that NAMA developers were typically paying interest at ECB + 2% (that is 3% at today’s rates). If, and to stress we do not know in the present case, the interest rate charged to Paddy on the best part of a €1bn facility is 3% and on the other hand Ireland must pay 5.8-6% to the IMF/EU for the funds to bailout Anglo in particular and potentially Bank of Ireland, which is flouncing around at the moment ahead of its deadline in 40 days to raise €1.5bn (not to mention pay the NPRF €214m interest on its preference shares “investment”), then is it not scandalous that, going forward, the nation subsidises this developer to the tune of €22m per year (5.8% – 3% * €784m).
NAMA of course was intending to raise up to €5bn to fund developments and working capital. However its funding plans were apparently put on hold following the freeze-out of the State in raising finance late last year. It is not presently clear how NAMA will raise this development funding and the agency seems to be relying at present on some loan repayments from borrowers to enable it make new advances to selected borrowers. What rate is NAMA charging on these additional advances and does it mean that if NAMA (which is effectively state-owned) is charging less that the State is paying to the IMF/EU that we are again subsidising developers?
Arguably variable rate mortgage lenders paying less than 4% at present are also being subsidised, though it seems likely that lenders will start raising their standard variable rate in the near future with Permanent TSB being the first tipped to raise their rates by 0.5% from 4.19% to 4.69% with others expected to follow suit. There are some 792,000 mortgages in the State with some 271,000 standard variable rate (407,000 trackers and 113,000 fixed). So standard variable rate mortgage holders might also be receiving a subsidy which is apparently fast reducing but that still leaves well over 80% of the population not receiving any subsidy.

source:URL: http://wp.me/pNlCf-Xc



Again we catch Lenihan and Co giving support to their pals in the building Industry having bailed out the bondholders and the bankers closer to home he is still looking after the chosen few .His conduct in the last few days stabbing his so called colleagues in the back with regards to the Cowen confidence vote only shows that this man is a true Slievieen as we say in the west (not to be trusted)A lifetime in a political party like Fianna Fail where your co members and colleagues are more dangerous to your prospects of staying in the Dail than the opposition political parties. There seems to be a culture of mistrust and Fear of been out done!

Allowing people like this to run our country is only asking for disaster to happen. Over the last two years the Irish Nation have experienced the largest fraud in the history of the state and this NAMA con job continues to fleece us the taxpayers and its all down to this conman who clearly cannot be trusted when he cannot be relied upon when he gives his word even to his so called pals in Government. The Greens have now woke up to this and are looking now to get out all too late I’m afraid!

Brendan McDonough keeping Lenihan’s secretes at NAMA

-Ireland final in buck-passing nears climax: NAMA CEO versus the Financial Regulator

namawinelake | January 9, 2011 at 3:32 pm | Categories: NAMA | URL: http://wp.me/pNlCf-Vb

This coming Thursday 14th January at 11.30am will see NAMA CEO, Brendan McDonagh returning to the Committee of Public Accounts (CPA) for an uncomfortable questioning session which will focus on the responses given by Brendan at the CPA hearing on 18th November 2010. In particular he is to be quizzed on his response to Deputy Michael McGrath’s series of questions on the quality of information provided to NAMA by the banks in 2009. There was an emerging controversy just before Christmas with the CPA seeming to claim that they felt they were misled by the NAMA CEO whose responses to the Committee in November seemed to confirm that there were machinations at the banks which deserved Garda investigation. The buck-passing referred to in the title refers to the subsequent efforts by Brendan and the Financial Regulator, Matthew Elderfield to dodge responsibility for progressing a new investigation into the banks’ provision of information to NAMA.

Here’s how the buck-passing early rounds played out:

2009 – Banks provide information to NAMA on loans which informs the NAMA draft Business Plan. Banks issue press releases on NAMA discounts – this is AIB’s which includes “Based on the Minister’s estimated average industry wide discount of 30% (which as we have already stated is expected to exceed the estimated maximum for AIB)” (AIB’s is now estimated at 60%) and Bank of Ireland’s on 17th September, 2009 has seemingly been removed from its press release website but is available elsewhere from their website here which says “On the basis of these positive variations, taking into account the extensive work that has been done internally over the past year, and the illustrative methodology set out in the Supplementary Documentation published by the Department of Finance, Bank of Ireland believes that the discount applicable to Bank of Ireland loans potentially transferring to NAMA could be significantly less than the estimated aggregate discount of 30%.”

July 2010 – NAMA produces second Business Plan which shows a substantial deterioration in outlook from a Net Present Value of €4.8bn to €1bn (though there were scenarios at minus €0.8bn to plus €3.8bn).

August 2010 – NAMA Chairman, Frank Daly, criticizes the information provided by the banks

18th November, 2010 – Brendan tells the CPA “The first port of call in terms of looking at that must be the Financial Regulator, who has responsibility for supervising and knowing what goes on within the banks. We will provide whatever assistance we can to anybody. I can assure the Deputy that we have established the facts and will make that information available to any regulatory authority, if appropriate. This is where we are now. Other people have questions to answer on what was done in the past.”

24th November, 2010 – CPA writes to Matthew apprising him of Committee proceedings and Brendan’s responses. This letter does not appear to be in the public domain.

26th November, 2010 – Matthew writes to the CPA acknowledging their letter and stating “My office expects that Mr McDonagh will contact the Central Bank with information which substantiates a claim that NAMA was provided with false or misleading information by the banks”

6th December, 2010 – Matthew writes to the CPA again and states “It is a matter for NAMA to determine, following a consideration of its obligations, both the requirement to report and the relevant authority to which the report is made..” The letter suggests that Matthew has not received information from NAMA on which he can act.

17th December, 2010 – Although not yet available on the CPA’s document website, there was a report in the Irish Times that Matthew wrote a third letter to the CPA which reportedly said “We received a response from Mr McDonagh this week. Nama’s letter does not refer any matter to us in respect of the conduct of any regulated entity,” and “Further, Nama’s letter informs us that it does not have a valid basis to suspect that there has been any criminal offence or other contravention of the Nama Act.”. The CPA felt they had been misled and have ordered the NAMA CEO back to their Committee lickety-split to answer for himself and that brings us to the session scheduled for this coming Thursday.

So who is responsible for investigating possible wrongdoing by the banks in 2009 in their provision of information to NAMA (and potentially their shareholders)? Here are some statistics which are far from vital:

So in the red shirt you have Brendan McDonagh, the 42-year old management accountant who has spent his career with the ESB and the NTMA and today is reported to earn €500,000 per annum as he directly manages 100 staff (with another 50 reportedly on the way) and an army of third party service providers. Whilst not a career civil servant, he is likely to be well-schooled in the art of passing the buck.

And in the blue shirt, you have Matthew Elderfield, the former chief executive of the Bermuda Monetary Authority (BMA – the financial authority for an island group with a population of 68,000 (less than the size of Galway) and with an annual GDP of €4bn). Matthew was famously reported to have taken an awful cut in salary when he took over as our Regulator on 4th January 2010 – Matthew was reportedly being paid €340,000 a year here in March 2010 and his Bermudan salary was put at US $730,000 (€540,000) – not bad for a man who, according to the 2008 and 2009 BMA accounts, was managing 130 staff whose annual payroll costs totalled USD $23m. A recent interview in the Independent claimed Matthew had taken a pay cut of 15% after he arrived which might place his salary today at €290,000 (just below Central Bank governor Honohan on €300,000 a year). Matthew’s previous career included 8 eight years at the UK’s Financial Services Authority where he was reportedly responsible for supervising Northern Rock before its bailout in 2007. His career would suggest he is the under-dog in this buck-passing competition.

The view on here is that NAMA has protesteth far too much at the quality of information provided to it in 2009. After all, it was NAMA’s business plan and they employed, at vast expense, experts to assist them in the early days which would realistically have involved testing the assumptions and information used in the business plan. NAMA got its operating costs spectacularly wrong by 40% (€2.6bn in 10-year NPV terms in 2009 and €1.6bn in the same terms in 2010). So NAMA might have dealt with its inaccurate draft business plan in a more responsible way – yes the information from the banks was wrong but the due diligence on that information at NAMA was grossly inadequate. And the owner of the business plan is not the banks, not the developers, not the third party service providers, not the Department of Finance – the owner is NAMA and the agency should accept its responsibilities.

On Thursday next we will get to observe what should be the final in the buck-passing championship as we should find out whether it is NAMA’s or the Financial Regulator’s responsibility to progress any new investigation into any misleading or false information provided by the banks to NAMA in 2009.

source : http://namawinelake.wordpress.com/2011/01/09/all-ireland-final-in-buck-passing-nears-climax-nama-ceo-versus-the-financial-regulator/

Comment :

We are not going to get any information from this current lot at NAMA they are been protected by Lenihan and as long as he is pulling the strings we will get nowhere.

The Guys are in the top jobs because Lenihan can rely on them to keep their mouths shut!

We will have to wait until we get a new government and hopefully we will have a group of independent TD’s  that will force all information out into the open and then we might get some accountability and some answers .

2010 and the NAMA Fraud

A Review of NAMA in 2010
namawinelake | December 30, 2010 at 3:23 pm | Categories: NAMA | URL: http://wp.me/pNlCf-TR

It was Dr Michael Somers, the former head of the NTMA that highlighted a flaw in the Irish character in his speech at the MacGill Summer School in beautiful Donegal in July this year – the flaw being that we tend to focus on process in this country at the expense of objective. It would be unfair to say that NAMA has not achieved its objectives yet. After all this year was mostly going to have been about establishing the agency, recruiting staff, setting procedures and of course valuing and acquiring the target loans from the financial institutions. With loan acquisition, NAMA missed its target (set out in the draft NAMA Business Plan in October 2009) of transferring the first tranche in December 2009 (actually transferred on 10th May, 2010) and to have completed the transfers of €77bn of loans in July 2010 (€71bn of loans have been transferred to date, though only 60% have been subjected to granular due diligence and valuation).  But overall NAMA has transferred a colossal volume of loans, €27bn of which have been agreed by the EU and with the loan acquisition process being described as “reasonable” by the Comptroller. NAMA has paid banks some €30.2bn of bonds (presumably 5% are subordinated bonds which will only be honoured if NAMA makes a profit) which are exchangeable for cash equivalent and can be made available for lending to the wider economy. Although up-to-date numbers are not available, it is likely that NAMA has spent close to €200m on professional fees in 2010 having conducted massive procurement exercises. The agency has an estimated headcount of 100 at the end of the year. The curious legal case involving Paddy McKillen was comprehensively beaten at the High Court and the betting is that the appeal to the Supreme Court will not be successful for Paddy. The NAMA CEO and Chairman have spread NAMA’s message positively from Belfast to Kerry, from Galway to the committee rooms of the Oireachtas (here and here), from the BBC to RTE (though it was the Economist that gave NAMA the greatest leg-up by saying “In the long run Ireland’s response is the better” in August 2010). And all in all, the agency has avoided scandal during its first 12 months of operation. So as processes go, the acquisition phase of NAMA’s existence can be judged a qualified success.
And the acquisition phase is important to NAMA’s success – the oft-repeated rule for the house flipper – “you make your profit when you buy” – is relevant to NAMA also. But it is the next phase, the management and disposal of assets, that will determine NAMA’s overall success and the early indications are not good. Bear in mind that the first tranche had started to transfer in March 2010 and was completely absorbed by the agency on 10th May, 2010 – that’s nearly eight months ago. Information reaching here suggests that not one of the first 10 business plans has been agreed, that is, signed by both the developer and NAMA. So much for NAMA’s claim that developers need submit plans within 30 days of their loans being acquired and that NAMA would determine in less than three months how to proceed with the borrower. And remember that in this phase NAMA controls practically all of the cards, unless the Construction Industry Federation wakes up to its responsibility in providing a united voice for developers. In the next phase, NAMA will be operating alongside the mighty beast that is “the market”. And whilst markets can be irrational, exuberant and dysfunctional they tend to be objective driven in terms of financial bottom lines. And that may well be the story of 2011 – the process-driven agency versus the objective-driven market. But that will be the subject of another entry.
Meanwhile, I give you yet another end-of-year review of NAMA, more comprehensive than most (if not all) and penned by a blog which focusses on the agency.
NAMA month by month
January 2010 – A quiet month for NAMA with the application for EU approval being submitted just before Christmas 2009, the valuation panel being appointed in December 2009 and loans being valued. Irish Times property pundits suggest that residential property would drop by 10% in 2010 with a pick up in prices in the second half. We’ll get to see how accurate they were when the limited Permanent TSB/ESRI house price series for Quarter 4, 2010 is produced at the end of January 2011.
February – Despite the best efforts of FG’s Senator Eugene Regan, the man from Brussels says “yes” to NAMA with the redacted decision published in April. News from the commercial court that a field in Athlone valued previously at €31m was now worth €600,000 – although far more difficult to index Savills claim later in the year that on average, development land has fallen 75-90% from peak.
March – the first tranche begins to transfer by 31st March (just about  with only €0.37bn of loans from EBS and INBS transferred). We learn that NAMA is to acquire €36bn of loans from Anglo, up €8bn from a few months before and indeed that €36bn may well grow now that NAMA is considering acquiring Anglo’s land and development exposures of €0-5m. The publication of the NAMA Long Term Economic Value regulation tells us that NAMA is prevented from using data produced after 10th January, 2010 when assessing LEV – oh dear. Information continues to leak from NAMA to selected media outlets. Hopes for NAMA developer, the John J Fleming group flounder as a judge characterises its examinership plan for survival as “an aspiration based on hope”. We ended the year with news that John Fleming himself was seeking bankruptcy from his current base in Essex in the UK. The third of three major studies into vacant housing concludes we may have 350,000 of vacant homes, more than 150,000 than we should have. The Ghost Estates review published in October 2010 suggests that there are some 30,000 vacant new homes on certain estates.
April – NAMA at the Oireachtas – we’re all very impressed with Brendan McDonough. Information Commissioner Emily O’Reilly is the latest to demand that NAMA be brought under the umbrella of the Freedom of Information legislation – demands thus far rejected by the Minister for Finance. NAMA issues details of the bonds and subordinated debt it is giving to banks in exchange for loans – the interest rate on the subordinated debt is tied to the rate on the 10-year bond rate (9% as of today) – nasty. Spousal transfers come into focus – not for the first time nor the last. The image of bulldozers reversing the construction boom hoves into view as NAMA confirms that some developments will meet their fate with a JCB. News that Grafton Street rents have fallen by 44% in one year, though they are still falling by 20% per annum. Brian Lenihan tells us that we can now buy homes with confidence with prices being realistic.
May – Tranche 1 completed. NAMA Chairman, Frank Daly forced to clarify comments in a speech to the Association of Compliance Officers – he didn’t mean to suggest NAMA would stop pursuing developers once it had recovered the amount NAMA paid for the loan. It costs €500 a year to maintain the NAMA website – really, that much? NAMA given a €250m recoupable working capital buffer advance which it manages to repay in October. Former IMF bigwig, Steven Seeling, joins the NAMA board.  Developer Simon Kelly tells the Independent that there’s no point in NAMA taking back developers’ cars because they’re a drop in the ocean compared with the amounts owing – and judging by the wheels on show in December’s Prime Time Investigates, NAMA agrees with him. NAMA makes some friends in Belfast.
June – Minister for Finance, Brian Lenihan tells the Oireachtas that despite the decline in values of Irish property since November, 2009 (the NAMA valuation date), the fact that NAMA’s portfolio includes other national markets means the effect of property value changes since November 2009 on NAMA’s loans has been “broadly neutral”. NAMA’s importance to the hotel sector is becoming apparent and indeed it seems that NAMA will have control over some 90 hotels in the State when it is finished with acquiring loans. Paddy McKillen’s Maybourne assets (Claridge’s, the Connaught and the Berkeley hotels in London) come into focus with reports that he is seeking to refinance the group and avoid NAMA – still no update as of today with debt repayment due by the end of December 2010. The IMF urges NAMA to begin disposals sooner rather than later – that was during a routine visit, what’s the IMF position now that they control the bailout? The Sunday Tribune claims NAMA CEO, Brendan McDonagh is on €500,000 a year. The RICS describes NAMA as a “thunderous cloud that overhangs the property market”
July – NAMA publishes its Business Plan – is that it? Dr Michael Somers, former head of the NTMA, attacks NAMA at the MacGill Summer School – NAMA is “bizarre” says Michael. The Mail on Sunday publishes story about NAMA’s Head of Portfolio Management, John Mulcahy, allegedly accepting hospitality on the yacht of the former owner of the Glass Bottle site, Paul Coulson. Paddy Kelly sticks the boot into John at the MacGill Summer School when he reveals that John valued Burlington Plaza at €350m in 2007. Deputy Frank Fahey entertains us all with his grasp of how NAMA bonds operate. NAMA publishes Quarter 1 accounts – loss of €7m. NAMA publishes Codes of Practice. Willie O’Dea suffering fierce stress worried that he might break NAMA’s anti-lobbying rules.
August – EU approves Tranche 1. Tranche 2 complete. Northern Irish Finance and Personnel Minister, Sammy Wilson, gives NAMA a thumbs-up. Top 10 developer, Cosgrave, gets planning permission for 1,500 dwellings in Dun Laoghaire. Suggestion that Dr Peter Bacon has been appointed as an adviser to NAMA, having been one of its conceptual architects. Start of the saga involving Top 20 developer, Paddy Kelly’s BMW 745i, repossessed by ACC, then returned with an apology only to be taken again in December. Sean Dunne, the Bane of Belle Haven, secures planning permission on land bought for €197m an acre in Ballsbridge.
September – NAMA at Cantillon and Galway. NAMA launches €5bn funding  programme which now seems to have been abandoned. Big Bang announcement for the future of Irish banking sees NAMA abandon €5-20m exposures at AIB and BoI (later reversed by the IMF) and NAMA provide estimates of final discounts (67% for Anglo, 60% for AIB yet only 42% for BoI). The massive scope of NAMA’s operations in Northern Ireland is laid out. Both the Credit Review Office and the Irish Small and Medium Sized Enterprises Association report better credit availability. NAMA abandons Tranche 3. More details on the investors in the NAMA Special Purpose Vehicle as we find out that counter staff at AIB have put part of their pensions on the line. Rumours about NAMA’s first British sale with Derek Quinlan’s Mayfair carpark (understood to have stalled but is likely to be sold in 2011). Irish bond rates skyrocket which pushes up the price NAMA pays for loans. Liam Carroll’s Anglo HQ finally secures planning permission.
October – NAMA gets into hot water over developer salaries and seems to clarify that it doesn’t pay more than €200,000 per annum. NAMA’s under-resourcing is criticised by McDonalds chief. NAMA pays just €38m for the €288m loans in respect of the Glass Bottle site. NAMA obtains judgment against Paddy Shovlin and the Fitzpatrick brothers. Ratings agency Fitch say that NAMA may break even because of the deep discounts it is applying to loans. The court case of the year gets underway as Paddy McKillen seeks to have NAMA’s treatment of his loans reviewed. Paddy loses his case comprehensively though he has appealed to the Supreme Court and a decision is expected in January 2011.
November – NAMA at the Committee of Public Accounts. CIF commission report that is nasty to NAMA and NAMA responds in kind.  EU approves Tranche 2. IMF bailout extends NAMA scope to include €0-20m exposures at AIB and BoI. NAMA lawyers up with the appointment of insolvency practitioners. Bernard McNamara’s property empire starts to implode with NAMA appointing receivers to Michael McNamara construction and Radora. Comptroller and Auditor General’s haphazardly produced report on NAMA judges the agency “reasonable” in its loan acquisition phase. Liquidator appointed to the Pierse group. NAMA’s Q2, 2010 accounts produced which show a year to date loss of €1m but should have shown a loss of €600m. NAMA repays €250m advance from the government. NAMA’s most valuable asset, the Battersea Power Station site, gets planning permission.
December – NAMA announces that it has acquired €71.2bn of loans at par value and paid €30.2bn in consideration. The NAMA CEO’s comments about the banks at the Committee of Public Accounts promise to develop legs in the New Year amidst apparent claims by the Committee that it was misled. Blackstone gives us a taste of the sort of characters NAMA will need engage with in 2011 and beyond. The Whelan Group is liquidated but we need wait until early January 2011 to find out what will happen to McInerney.
Performance against objectives (NAMA doesn’t have formal objectives so what follows is subjective)
(1) Facilitating lending – difficult to say because there are a number of factors that affect lending and the needs of the wider economy (demand for lending) is arguably more important than banks’ ability to lend (supply). The Credit Review Office and the Irish Small and Medium Enterprises Association (ISME) both support the proposition that lending conditions for businesses are improving. That said, the economy has suffered a severe contraction, is likely to have stagnated in 2010 and with a prospect of marginal growth in 2011 (0.9-1.75% growth in GDP according to the EU/IMF/government) so demand for credit is subdued. And the outlook might make NAMA irrelevant – if Irish banks have to deleverage by cutting lending by €90bn in the next three years and if deposits continue to flee to perceived safer havens, then NAMA may be of only marginal significance to the factors affecting lending.
(2) Making a profit for taxpayers – too early to say. But NAMA is likely to have made a loss of €1bn+ in the first year which is concealed by NAMA not revaluing its loans (valued by reference to November 2009 and uplifted by an average of 10% for “long term economic value”). The hope must be that conditions improve over NAMA’s lifetime and that NAMA judiciously manages its vast portfolio so that a profit can be returned to the taxpayer. I would have said that it is too early to have an informed opinion on NAMA’s profitability prospects but I would be cautious. As indicated by the NWL index at the top of this page, the markets in which NAMA operates need increase in value by a weighted average of 10% (from 912 to 1000) for NAMA to break even at a gross profit level.
(3) Creating certainty about banks balance sheets – again NAMA has done its job reasonably well with valuing some 60% of the €71bn of loans it has acquired at a granular level and with some 40% of the valuations of the €71bn being approved by the EU. The difficulty is that, even after NAMA has completed its acquisitions (non land and development), banks will still have some €70bn of commercial property loans on their books and another €70bn of non-property commercial lending plus €120bn of personal lending including mortgages. And don’t mention off balancesheet exposures like derivatives. So no, there is not certainty in the banks’ balance sheets but that is not NAMA’s fault. I have some faith in the IMF-mandated exercise to examine non-NAMA loans and off balancesheet exposures in the first quarter of 2011.
(4) Stabilising property/construction sector – a flaw in the NAMA concept and one not apparently considered by Dr Peter Bacon, one of NAMA’s conceptual architects, was that the property market may not be at the bottom or indeed close to it. Property prices in Ireland have continued to decline this year (gradually according to the very limited Permanent TSB/ERI house prices series, more so according to the commercial indices). Looking forward, it is hard to see any recovery in house prices in the short term and despite the brave assertions of the commercial sector, rents are plummeting (20% per annum) and that presages capital values continuing to fall (already 60% off peak values). Yes other markets where NAMA has 33% of its assets show a mixed picture, increases in the UK, Far East and US, falls in Europe, Middle East and some exotic locales like Cape Verde. But in Ireland the picture has been almost universally negative. NAMA has arguably interfered with the natural trajectory of prices and stalled firesales but it has not halted the underlying decline in prices as the country responds to what is a depression.

source http://namawinelake.wordpress.com/author/namawinelake/


There is no getting away from it NAMA is by  far the worst fraud committed on the Irish people and the perpetrators will have to face the people just like Nicolae Ceausescu had to do when his time was up .No matter how out of touch politicians are with the people at some point the people show who really is master!

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