THE country’s bad bank announced yesterday that it has paid back €500 million in bonds, cutting its debt burden by €1bn in just over 12 months.
NAMA said the debt repayment was further evidence that “NAMA is doing what it was set up to do,” the agency’s chairman Frank Daly said.
The NAMA board announced the agency will repay €500m of bonds this week.
This is a follow on from the first repayments of bonds by the agency made in March of this year amounting to €250m.
It now means the agency has repaid some €750m of debt since the start of the year.
Finance Minister Michael Noonan has been advised of this decision, the statement from the agency said last night.
NAMA also repaid €299m of advances made by the Minister for Finance in October 2010 and end of February 2011.
As a result NAMA has reduced its indebtedness by €1.049bn in just over one year.
Speaking on the decision, Mr Daly described this second repayment of NAMA bonds as significant. “This is further evidence of NAMA doing what it was set up to do; ensuring the repayment of loans by debtors, managing those debtors very carefully and using the proceeds to repay the bonds NAMA issued to fund the whole project,” he said. NAMA has made very good progress in 14 months since EU approval, he added.
NAMA has issued €30.5 billion in NAMA bonds to finance the acquisition of loans with a nominal value of some €72.3bn from the five Irish banks.
This represented a discount of 58% on the face value of the loans held by the banks. The NAMA bonds are used as collateral by the banks to raise cash from the ECB.
Over its lifetime the agency intends to pay off all of the money it borrowed to fund the banks and if there is any excess cash it will be returned to the taxpayer.
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