Brendan McDonagh, Chief Executive of the National Asset Management Agency (NAMA), has confirmed that the agency has commenced a tender process to select a panel of Loan Sale Advisors in both Europe (including UK) and the US to assist the agency to sell acquired loans which are linked to assets in those markets. Mr. McDonagh was speaking at the Corporate Restructuring Summit held in Dublin today. NAMA has acquired approximately €600 million worth of loans linked to assets in the United States and €30 billion worth of loans linked to assets in the UK and Europe.

Tender for Loan Sale Advisors

Speaking at the event, Mr. McDonagh said that the appointment of Loan Sale Advisors reflected the agency’s plans to accelerate the disposal of assets and loans acquired by the Agency from five participating Irish banks: “Loan sales will form a major part of our strategy going forward now that we are almost through the debtor business plans and now that we’ve gleaned considerable knowledge about the assets and the debtors”.

Mr. McDonagh said that the agency would be open to considering the sale of loans related to “individual assets, whole debtor connections or groups of loans by geography”. Mr. McDonagh stressed that the involvement of Loan Sale Advisors would also help to ensure that any sale of loan books followed a competitive process and achieved the best price realisable.

Agency’s First Staple Finance offering planned within weeks

Mr. McDonagh also confirmed that NAMA planned to offer its first staple financing package for commercial property within the next two weeks, a move aimed at testing the market for such transactions. Staple finance involves a buyer paying up to 25/30% of the asset purchase price up-front with the remainder being paid to NAMA over an agreed number of years.

Mr McDonagh warned, however, that NAMA will attach stringent conditions to any property purchaser who avails of NAMA staple financing. “We will have to be satisfied as to their track record, reputation and capacity to repay. They will have to be in a position to inject equity capital of 25-30% up front. This will result in an immediate paydown of NAMA debt and create a performing loan,” he stated. 

He added that assets involved are likely to be commercial investment assets which are well-tenanted and income-producing, such as large office buildings, shopping centres and other retail and industrial properties.

Signs of interest from foreign investors in commercial property in Ireland

Mr McDonagh said that after the significant price corrections in recent years, there is strong indicative interest from investors, mainly foreign, in purchasing Irish commercial property.

“International investors look to Ireland as a recovery story where they believe there may be value and opportunity – the recent improvement in Irish bond yields is very much a welcome development which differentiates Ireland from other peripheral nations,” Mr McDonagh stated. 

“We have seen a lot of interest from professional investors who have a more long-term performance horizon in mind and who are interested in acquiring strong incomeproducing assets which will provide a steady return over time”, Mr McDonagh said. He added that, while liquidity remains the key constraint, NAMA is ready to be innovative in monetising its portfolio with additional initiatives being progressed over the coming months.

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