Nama free to transfer loans without restriction

The National Asset Management Agency is free to transfer loans without restriction, according to the English Court of Appeal ruling on the transfer of the Maybourne Hotel Group to the Barclay Brothers.

Judge David Neuberger said in a ruling yesterday that the transfer of the debt by Nama to a holding company controlled by the Barclay brothers’ company, Maybourne Finance, last year was within Nama’s remit.

Paddy McKillen was challenging Nama’s transfer of one of his companies’ (Coroin) debts to the Barclay brothers. Coroin is a parent company of the Maybourne Hotels affiliate, which owns the Berkeley, Claridge’s and Connaught hotels. Mr McKillen holds 36% of the hotel company.

Mr McKillen was loaned €800m by two Irish banks to buy the hotels in 2005. Nama acquired the loans to Coroin from the banks in 2010 and later sold the debt to the Barclaybrothers, owners of London’s Ritz Hotel and Daily Telegraph.

Lawyer for the Barclays, Marco Compagnoni, said the ruling confirms the Barclay brothers are the lenders to Mr McKillen’s company. “It is a key moment because it confirms that Maybourne Finance is the lender to Coroin,” said Mr Compagnoni

However a spokesperson for Mr McKillen said he disagreed that the finding was of significance.

“The judgment today is a small part of the main unfair prejudice and conspiracy proceedings in the High Court and does not lead to the automatic strike out of any other aspects of Mr McKillen’s claims.”

Judgment is still awaited from the English High Court in the trial of the broader issues in Mr McKillen’s case against the Barclay Brothers but as a result of the Court of Appeal’s decision the trial will not impact on Nama.

Nama chief executive Brendan McDonagh welcomed the ruling.

“I am delighted that the English Court of Appeal has upheld the validity of Nama’s transfer of the Coroin debt, a transaction which led to a very substantial financial recovery by Nama,” he said.

Meanwhile, Nama has redeemed a further €2bn of senior bonds, bringing it almost halfway to meeting a repayment target set under the country’s EU/IMF bailout.

The redemption is fourth and largest by Nama and means it has reduced its indebtedness by over €3.5bn.