Pimco denies it was forced out of Project Eagle by Nama

Pimco denies it was forced out of Project Eagle by Nama

A senior Nama official told the original bidder for the Northern Irish loan book, US firm Pimco, that some other way could be found to stay in the process, despite the emergence of controversial 'fixer' fees, writes Irish Examiner Political Editor Daniel McConnell.

Nama executive Ronnie Hanna played a key role in forcing US company Pimco out of the Project Eagle bidding race – after details of a £15 million “success fee” emerged.

At a meeting of the Dail's Public Accounts Committee (PAC), emails and board minutes relating to Pimco's exit from the process were discussed by committee members.

The documents, seen by the Irish Examiner, show that in 'Contemporaneous Minutes of a Nama Telephone Call with Pimco, 11 March 2014, discussions took place about how a fee could be paid in an alternative way which could see them remain in the process.

On the call for Pimco were Tom Rice, European Legal Counsel and Hugh Mildred, Legal Counsel

and for Nama were Ronnie Hanna and legal advisor Alan Stewart.

On the call Mr Rice who said Pimco was disappointed that disclosures were not made by the relevant parties to NAMA.

The Nama officials asked when Pimco had become aware of the issue.

Mr Rice said the [Project Eagle] process had been with NAMA for several months referenced April/May 2013.

He said this development went back to the origination of the deal with Pimco and the proposal for an acquisition fee, according to the documents.

Mr Rice added the proposed split for the fixer fee was mentioned some time ago and enquiries were made and it was looked at in more detail in the second half of 2013.

Reference was made to a draft letter of engagement. Once the amount was queried it became evident the payment was to be split 3 ways and clarification was sought from the firms afterwards, the documents show.

Mr Rice said they “did not want to continue in a process with any degree of impropriety for Pimco or NAMA and that Pimco was willing to withdraw completely”.

Mr Hanna asked whether Pimco considered other options. “TR asked what options and RH asked if it could be shaped differently for the arrangement fee to come out,” the minutes show.

Mr Rice said that if there was participation with any partners where there has been an issue [for NAMA] and Pimco just would not want to be looking at progressing.

Mr Hanna explained that the point was more to do with Frank Cushnahan, the Nama advisor at the heart of the controversy.

In the conversation referred to the current process as it stood and said Pimco was willing to withdraw.

Investment firm Pimco were not forced out of the sales process of Nama's sale of its northern loan book, the agency has said.

The admission given at the Public Accounts Committee (PAC) appears to “be at odds” with previous testimony given at the committee by senior Nama executives.

Nama went to great lengths to tell us that they forced Pimco to withdraw from the process, but the new documents do not tally with that assessment, PAC member and Sinn Fein TD Mary Lou McDonald said.

Project Eagle was the name given to more than 900 loans secured on properties in Northern Ireland, the UK and Republic, that Nama sold in April 2014 to US firm Cerberus for £1.3 billion.

A report into the sale, by Comptroller and Auditor General (C&AG) Séamus McCarthy, shows that Mr Hanna, Nama’s head of asset recovery, initially alerted its board that another bidder, Pimco, had agreed to pay the £15 million fee to former Nama adviser Frank Cushnahan,Belfast solicitors Tughans and US lawyers Brown Rudnick, which they were to split equally.

Earlier, Nama has denied that some potential investors were discouraged from participating in the controversial £1.3bn (€1.6bn) sale of its Northern Ireland loan book, known as Project Eagle.

Appearing before the Public Accounts Committee (PAC), Nama officials said that following a board decision to market Project Eagle, in February 2014 six potential bidders signed Non-Disclosure Agreements permitting them access to portfolio information.

Nama is under fire over the sale of the Northern loan book to US firm Cerberus and the agency had already decided to sell to Cerberus before it learned of a potential conflict of interest involving the successful bidder and two law firms, a report found last month.

The report by Comptroller and Auditor General (C&AG) Séamus McCarthy criticised Nama’s sale of the Project Eagle loans to Cerberus in April 2014 for £1.3 billion on the grounds it could have earned £190 million extra for the State and for failing to recognise the impact that a conflict of interest could have had on the sale.

Nama strongly disagreed with the C&AG report.

At the Committee today, Nama officials were pressed at length as to the logistics as to how the process took place.

As is normal in loan sales, documents were uploaded to a data room throughout the process.

The committee heard that the six potential bidders admitted to the data room were PIMCO, Oaktree, Cerberus, Lone Star, Goldman Sachs and Fortress.

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