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Nama may be ready to wind up by 2018

The National Asset Management Agency (Nama) is on target to complete its asset sales by 2018 and has generated more than €1 billion in cash receipts so far this year, according to a presentation delivered to investors this month by Nama chief executive Brendan McDonagh.

Mr McDonagh also outlined six potential challenges that Nama faces in shifting its remaining €11.1 billion of assets in Ireland. These are: keeping bidders interested in the Irish property story; competition from secondary trading of assets in off-market deals by private equity funds; competition from other European markets that may become “increasingly attractive as Irish property yields decline towards an average 5%”: economic and timing risks; staff retention; and development risk.

‘Very successful’ 2014

Mr McDonagh’s presentation, which is dated April 1st, stated that Nama had a “very successful” 2014. He said the agency had collected €25 billion in cash from loans since its inception five years ago.

In January, Nama said it had collected €23.7 billion in disposal receipts, so Mr McDonagh’s latest presentation suggests that some €1.3 billion in cash was generated by Nama in the first three months of this year.

Of the €11.1 billion remaining in Nama’s Irish portfolio, some €7.7 billion was located in Dublin, €917 million in Cork, €526 million in Galway and €498 million in Kildare. At the other end of the scale, just €5 million was located in Longford, €8 million in Monaghan and €10 million in Leitrim.

The presentation noted that Nama had provided rent abatements worth an annual €20 million to small and medium enterprises and “long-term reliefs” of more than €40 million. Some 15,000 jobs at trading businesses in Ireland are linked to loans with the agency.

Liability

Mr McDonagh also told investors that Ireland’s contingent liability arising from Nama and Irish Bank Resolution Corporation (IBRC) has been reduced from €43 billion at the time of IBRC’s liquidation in February 2013 to €12.6 billion currently.

He said Nama was “firmly on course” to repay all of its €30.2 billion in senior debt by the end of 2018 and “recover all carrying costs, and working and development capital advances to debtors”. At least 80% of its senior debt – €24 billion – is due to be paid down by the end of 2016.

Mr McDonagh reminded investors of the scale of Nama’s work since its inception. It acquired €74 billion worth of par-value loans from Irish banks, relating to 780 debtors, more than 5,000 “borrowing entities” and 60,000 “property units”. Nama was originally due to wind up by 2020.

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