NAMA will redeem another €2.5 billion of senior bonds this week, bringing to €24.6 billion the amount of senior debt the bad bank has repaid.
The latest redemption comes exactly six years after Ireland’s asset management agency began buying bad property loans with a par value of €74 billion, funded by €30 billion of government-backed senior bonds. Helped by the recovered property markets, first in the UK and then in Ireland, the bad bank is ahead of its original schedule and on course to meet its revised target of redeeming all its senior debt by 2018.
NAMA also intends to repay €1.6 billion of subordinated debt before its wind up date in 2020.
NAMA chief executive Brendan McDonagh said: “The contingent liability arising from NAMA’s senior debt is now less than one-fifth of its peak size. This is a major achievement that has been made possible by the strong cash flows that NAMA has generated from its assets.
“We remain on course to eliminate this contingent liability in full by 2018 and, through our strategic programmes of disposals and investment, to deliver an overall surplus of €2 billion for Irish taxpayers once we are finished our work”.
At an event held earlier this year by debt advisor Hatfield Phillips, McDonagh said 2014 and 2015 were “remarkable years for NAMA” with “huge recovery in the Irish market and yields for certain assets reverting to pre-crisis yield levels. Investor demand is strong and we pushed big loan portfolio sales.”
NAMA has two large non-performing loan portfolios being lined up for sale: projects Ruby and Emerald with an estimated combined face value of €6.5 billion. Cushman & Wakefield were appointed to handle the sale.
Last September, NAMA sold Project Jewel, the loans secured by Dundrum Town Centre, Ireland’s largest shopping centre, and the Ilac and Pavillions centres, to Hammerson and Allianz Real Estate for €1.85 billion. In October, Cerberus won Project Arrow, buying the granular NPL portfolio at a deep discount to the €6.25 billion face value.