Author: Karl Whelan

NAMA SPV Opportunity for Private Investors: Form an Orderly Queue

Via RTE, we find out about the dividends to be paid to the NAMA Master SPV’s private investors

The private investors, along with NAMA, will receive an annual dividend linked to the performance of the Master SPV. According to a briefing note issued to TDs today, this will be capped at the 10-year Irish Government bond yield at the time the dividend is declared.

When the SPV is wound up, the investors will be re-paid their capital only if the Master SPV has the resources. They will receive a further bonus of 10% if the Master SPV makes a profit.

So, if NAMA loses money, the private investors will lose all of their €51 million, while if NAMA makes money, they will receive a maximum of Irish government bond yields plus 10% over ten years.

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ECB and Nationalised Banks, Again

My former colleague, Mike Casey, wrote the following in this article in today’s Irish Times:

When Nama is up and running, the banks will be able to borrow far greater amounts from the ECB. Some of this money may be lent to the private sector (one hopes), but it is likely that substantial funds will be made available to the Government to finance the budget deficit.

This may be the main reason why the Irish banks were not nationalised. If they had been nationalised this transfer of funds could not occur, since the ECB cannot lend directly to government.

I’m afraid I have to disagree with this argument for why Irish banks cannot be nationalised.

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Peter Mathews Talk Tonight

I linked a few weeks ago to a video of Peter Mathews discussing NAMA. Peter is a former banker with ICC and currently an independent banking and property consultant (here‘s a link to a full profile). He is giving a public talk tonight at the RDS Concert Hall at 8PM titled “NAMA Will Lose €12 billion: There’s a Sounder Alternative.”  I have spoken with Peter on a number of occasions and have found him to be highly informative on the subject of Irish banking so I recommend attending his talk if you can.

NAMA SPV Plan Versus NAMA Draft Business Plan?

Last week NAMA published a draft business plan. It contained a detailed description of how NAMA was supposed to operate. It told us, for instance, that the loans of the largest 100 to 150 borrowers “will be managed directly by NAMA.” (page 28) and explained a timeline for how NAMA intended to recover funds from the loans it was acquiring.

NAMA’s draft business plan did not mention a Special Purpose Vehicle.

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Proposed NAMA Amendments

A list of proposed amendments to the NAMA bill is available here.