Kevin O'Higgins Solicitors

Nama lining up €4bn sale of property loans

Friday, 22 July, 2016
Sharon Smyth and Peter Flanagan

The National Asset Management Agency (Nama) is planning to sell real estate loans with a face value of about €4bn, in what could be one of its last major disposal programmes, two people with knowledge of the matter said.

Nama is expected to seek bids for the portfolio, known as Project Gem, towards the end of 2016. The portfolio will sell at a substantial discount to its par value - the face value of the loans owned, the sources said.

A spokesman for Nama declined to comment. Last month Nama selected Oaktree Capital Group as the preferred bidder for a package it was selling of loans with a face value of €4.7bn.

The US fund is reckoned to be paying about €800m for the loans, packaged up in two lots known as Project Ruby and Project Emerald. The price is an indication of the expected difficulty in recovering value from the loans. Project Emerald is made up of loans with a par value of €2.5bn from 16 borrowers. Those loans are secured against 236 properties.

Most of the loans are related to commercial property, but more than a fifth of the underlying properties are residential.

Project Ruby involves loans that have a face value of €2.2bn tied to 15 borrowers. The debts are secured against 253 properties. Around 11pc of the portfolio is residential.

The agency held loans valued at €7.8bn at the end of last year, down from €13.4bn at the end of 2014, according to its annual report - although those figures are understood to be based on the current rather than nominal value of the loans.

Nama's sales to date have been dominated by large scale US buyers, mainly investment and so called vulture funds as well as assets managers linked to banks.

Irish Independent