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NAMA's overall loan purchases will come at 58% 'haircut'

The state’s bad bank will pay little over two-fifths of the book value to buy the totality of Ireland’s impaired loans.

Treasury Buildings, headquarters of NAMA.
Treasury Buildings, headquarters of NAMA.
Image: davida3 via Flickr

THE NATIONAL TREASURY MANAGEMENT AGENCY has confirmed that the state’s ‘bad bank’, NAMA, is to buy the remainder of the impaired loans held by Irish banks before the end of the year – with an overall average discount for its entire loan portfolio of 58%.

Reuters reports that NAMA, when the entirety of its loan purchases have been completed, will have paid €30.7bn in total to Ireland’s banks in order to take impaired loans off their banks – compared to the total value of €73.6bn of those loans.

It was announced in late September that the agency, which had originally intended to buy all loans with a value of over €5m from the banks, would instead restrict its outstanding purchases to loans worth at least €20m – thereby removing just under a tenth of its overall plan to buy €81bn in loans.

It was also announced at that time that it would be abandoning the remaining schedule of ‘tranches’ – packages of loans it would be acquiring – instead fast-tracking the purchasing procedure to buy all outstanding loans before the end of the year.

About the author:

Gavan Reilly

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