Ireland’s National Asset Management Agency will repay more than 3 billion euros ($4 billion) of bonds this year as it raises revenue by selling loans and renting out property, the agency’s chief executive officer said.
The agency, Ireland’s so-called bad bank, is trying to increase revenue by making debtors lease properties while it seeks buyers, McDonagh said April 10. NAMA is also weighing the sale of developers’ loan portfolios and planning to provide financing to help sell assets, he said.
NAMA used bonds to buy commercial-property loans with a face value of 74 billion euros from the country’s banks for 32 billion euros. The banks use the bonds as collateral to draw cash from the European Central Bank. McDonagh has redeemed about 1.25 billion euros of the bonds so far, with a goal of repaying 7.5 billion euros by the end of 2013.
NAMA bought the loans from the banks at values from three years ago and Irish commercial property prices have since fallen 20 percent, McDonagh said. Finance Minister Michael Noonan said last week that the agency will likely take an 800 million-euro impairment charge for 2011.
“The impairment charge doesn’t account for those parts of the portfolio which have grown in value,” McDonagh said. “It’s only looking at the negative side of the equation.”
Outside of Ireland, average prices in NAMA’s portfolio are up 10 percent since November 2009, McDonagh said.
The agency has spent about 280 million euros on working capital for developments overseas, he said. Most of that was to get planning permission for land in London and to complete other developments in the city.
“When projects have been sufficiently de-risked with pre- sales and things like that, we funded the development on the basis of creating a profit out the other side,” McDonagh said.
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