Ireland May Buy Anglo Irish Loans at Discount of More Than 60%
Patrick Honohan, governor of the Central Bank of Ireland
Haruyoshi Ymaguchi/Bloomberg
Patrick Honohan, governor of the Central Bank and Financial Services Authority of Ireland.
Patrick Honohan, governor of the Central Bank and Financial Services Authority of Ireland. Photographer: Haruyoshi Ymaguchi/Bloomberg
Ireland’s National Asset Management Agency, formed by the government to aid the nation’s ailing lenders, will apply a discount of more than 60 percent to a second batch of loans it’s buying from Anglo Irish Bank Corp., two people with direct knowledge of the plan said.
The agency, known as NAMA, will acquire more than 6 billion euros ($7.6 billion) of loans from the nationalized Irish lender in the transaction, according to the people, who declined to be identified because the details haven’t been disclosed. A spokesman for NAMA said the agency wouldn’t comment until a transfer occurred. A spokesman for Dublin-based Anglo Irish didn’t return a phone call seeking comment.
The size of the discount the agency applies to the loans will help determine how much the state has to pay to rescue Anglo, which was nationalized last year as bad debts surged. Central Bank Governor Patrick Honohan said this week that the bailout may cost about 25 billion euros, the equivalent of 15 percent of the country’s economy.
The agency applied a 55 percent discount to 10 billion euros of loans it bought from Anglo earlier this year. The government set up NAMA to purge lenders of souring real estate loans. In all, it is set to buy about 80 billion euros of assets from five lenders.
The government took over Anglo Irish, which bankrolled many of Ireland’s property developers during the country’s building boom, after losses surged amid a slump in real-estate prices. Prices have dropped by half since peaking in 2007.
To contact the reporter on this story: Joe Brennan at jbrennan29@bloomberg.net
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