Nama update

Original Figures from Brian Lenihan

In August NAMA reckoned that 40% of loans were generating cash.

September 2009, NAMA will buy €77 billion of loans for €54 billion including a premium of €7 billion to reflect the long-term economic value of the loans. In September, NAMA assumed that commercial property had fallen by 47% from peak when even then the published figure was 52% or more.

Now, NAMA will now buy €81 billion loans at a discount unknown but not the 30% originally estimated. It is likely that the €54 billion will turn out to be €43 billion and the worst case estimate is that the true value will turn out to be €30 billion. A lot less awful but still dreadful!

April 2010, 33% of loans are generating cash.

12.5% to 15% of the first €16 billion tranche consisted of rolled up interest – ie a total waste of money. – (no value at all). Last summer NAMA estimated that €9 billion of the €77 billion was rolled up interest – less than 12% of the total. Now that figure will be much higher.

The October NAMA business plan assumed that 20% of the €77 billion loans would be non-performing. NAMA claimed that with luck, the taxpayer would make a profit of €5 billion after 10 years. Look at Anglo Irish, since October Anglo has made increased bad loan provision from €3.9 billion to €15 billion plus… and the Anglo rolled up €1.2 billion in interest payments.

Not pretty is it?