Oct 14 (Reuters) - Legislation setting up Ireland's 54
billion euro 'bad bank' passed its first parliamentary hurdle
on Wednesday and work on valuing risky commercial property
loans to be taken from banks is set to begin as early as next
month.
Here are key points from the draft business plan of the National Asset Management Agency and Finance Minister Brian Lenihan's speech recommending it to parliament.
TIMELINE
NOVEMBER/DECEMBER
* Begin process of valuation, focusing first on 25 largest borrowers
* Aim to transfer 10-15 largest borrower exposures by year-end.
* NAMA to have staff of 30-35 by year-end
END-MARCH 2010
* Have 300 borrower exposures transferred, with a projected cumulative transferred book value of 50 billion euros, with 35 billion euros of government securities/subordinated debt issued in exchange
* Recruit an additional 40-45 staff for NAMA
END-JUNE 2010
* All 1,500 to 2,000 loans worth 77 billion billion euros transferred and 54 billion euros securities issued in return
FROM 2013
* NAMA's 54 billion euro debt to reduce by 6.5 billion euros per year from 2013 onwards, until NAMA's wind-up in 2020 when the then outstanding debt of 8.5 billion euros will be redeemed.
PARTICIPANTS:
Allied Irish Banks 24.1 billion euros
Anglo Irish Bank 28.4 billion euros
Bank of Ireland 15.5 billion euros
EBS Building Society 0.8 billion euros
Irish Nationwide Building Society 8.3 billion euros
GEOGRAPHICAL BREAKDOWN OF ASSET PORTFOLIO
Ireland 66.8 percent
Northern Ireland 6.2 percent
Britain 20.7 percent
USA 2.7 percent
Most of rest in Germany, Portugal, France, Czech Republic, Italy and Spain
BANK CAPITAL
* The government is prepared to provide more capital to banks should they need it but it wants to avoid further full nationalisations if possible.
PORTFOLIO
* Of the 77 billion euros of loans acquired by NAMA, 31 billion is seen cashflow-generating, with the remaining 46 billion not producing cash but some still regarded as performing due to being on interest rollup.
* The 'conservative' projections assume that 62 billion euros will ultimately be repaid by borrowers and that loan defaults or debt restructuring will occur on 15 billion, with 4 billion euros realised from asset sales on the defaults
NAMA is seen generating net cash of 5.48 billion euros over its lifespan and it is expected to be in the black from the first year and to stay there for almost a decade until its interest income dwindles and debt repayments rise.
* Its portfolio will be made up of 21 billion euros in 'development' loans, 28 billion in 'land' loans and 28 billion in 'associated loans.'
FOREIGN BANKS AND PROPERTY
* As 27 percent of NAMA's portfolio will be based in the UK and because British banks have substantial subsidiaries in Ireland, Irish officials are in talks with UK authorities on its impact on the UK market.
It remains unclear if foreign-owned banks will participate in NAMA itself.
(Reporting by Andras Gergely; Editing by Richard Chang) Keywords: IRELAND BANKS/PLAN (andras.gergely@reuters.com; +35315001518; Reuters Messaging: andras.gergely.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Here are key points from the draft business plan of the National Asset Management Agency and Finance Minister Brian Lenihan's speech recommending it to parliament.
TIMELINE
NOVEMBER/DECEMBER
* Begin process of valuation, focusing first on 25 largest borrowers
* Aim to transfer 10-15 largest borrower exposures by year-end.
* NAMA to have staff of 30-35 by year-end
END-MARCH 2010
* Have 300 borrower exposures transferred, with a projected cumulative transferred book value of 50 billion euros, with 35 billion euros of government securities/subordinated debt issued in exchange
* Recruit an additional 40-45 staff for NAMA
END-JUNE 2010
* All 1,500 to 2,000 loans worth 77 billion billion euros transferred and 54 billion euros securities issued in return
FROM 2013
* NAMA's 54 billion euro debt to reduce by 6.5 billion euros per year from 2013 onwards, until NAMA's wind-up in 2020 when the then outstanding debt of 8.5 billion euros will be redeemed.
PARTICIPANTS:
Allied Irish Banks 24.1 billion euros
Anglo Irish Bank 28.4 billion euros
Bank of Ireland 15.5 billion euros
EBS Building Society 0.8 billion euros
Irish Nationwide Building Society 8.3 billion euros
GEOGRAPHICAL BREAKDOWN OF ASSET PORTFOLIO
Ireland 66.8 percent
Northern Ireland 6.2 percent
Britain 20.7 percent
USA 2.7 percent
Most of rest in Germany, Portugal, France, Czech Republic, Italy and Spain
BANK CAPITAL
* The government is prepared to provide more capital to banks should they need it but it wants to avoid further full nationalisations if possible.
PORTFOLIO
* Of the 77 billion euros of loans acquired by NAMA, 31 billion is seen cashflow-generating, with the remaining 46 billion not producing cash but some still regarded as performing due to being on interest rollup.
* The 'conservative' projections assume that 62 billion euros will ultimately be repaid by borrowers and that loan defaults or debt restructuring will occur on 15 billion, with 4 billion euros realised from asset sales on the defaults
NAMA is seen generating net cash of 5.48 billion euros over its lifespan and it is expected to be in the black from the first year and to stay there for almost a decade until its interest income dwindles and debt repayments rise.
* Its portfolio will be made up of 21 billion euros in 'development' loans, 28 billion in 'land' loans and 28 billion in 'associated loans.'
FOREIGN BANKS AND PROPERTY
* As 27 percent of NAMA's portfolio will be based in the UK and because British banks have substantial subsidiaries in Ireland, Irish officials are in talks with UK authorities on its impact on the UK market.
It remains unclear if foreign-owned banks will participate in NAMA itself.
(Reporting by Andras Gergely; Editing by Richard Chang) Keywords: IRELAND BANKS/PLAN (andras.gergely@reuters.com; +35315001518; Reuters Messaging: andras.gergely.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.