Nama set to redeem 80% of its senior bonds by 2018

Finance Minister Michael Noonan, right, and Frank Daly, Chairman of Nama. When Brian Lenihan said the agency would turn a profit for the taxpayer, he was subjected to widespread ridicule. Picture Mark Stedman

Nama will redeem 80% of its senior bonds by 2018 and invest up to €3bn in the development of Dublin Docklands and residential housing, according to its latest review.

Speaking at the launch of the review, Finance Minister Michael Noonan, said that as well as its obligations to pay down its liabilities, Nama had a key strategic role to play in the development of the economy.

The agency has the potential to deliver 22,000 homes in Dublin over the next five years. There are 3,500 housing units under construction and a further 19,000 units either in the planning or pre-planning stages. There is an annual estimated demand of 8,000 to 10,000 houses in Dublin.

Mr Noonan said that the private sector “had not yet repaired sufficiently” to meet the demands of the housing market.

Nama would act “in partnership” with industry and prove the necessary finance, he added.

A total of €1.5bn has been earmarked by the agency to invest in residential housing projects throughout the country.

The Dublin Docklands has the same economic potential for the capital as Canary Wharf had for London, said the minister.

Nama will invest up to €1.5bn to develop a mix of ‘Grade A’ office accommodation to meet the growing demands of the IFSC and foreign direct investment.

There will also be a mix of retail and residential development in the area. This had the potential to create 14,000 construction jobs and 4,000 ancillary jobs.

By the end of 2011, Nama had acquired €74.2bn of gross loans from the banks in return for €30.2bn of senior bonds and €1.6bn of unguaranteed subordinated bonds. Payout on the subordinated bonds was predicated on Nama reaching certain targets.

These have now been met, said Mr Noonan.

The review by the Department of Finance found that Nama had so far met all of its objectives.

Moreover, a new target had been agreed for the agency to redeem 80% of its senior bonds by 2016, which is two years sooner than scheduled.

It is on track to redeem half of all senior bonds by the end of this year.

Nama chairman Frank Daly said it was too soon to speculate on how much of a surplus the agency would be able to return to the taxpayer.


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