NAMA to ban developers’ interest deals with banks

COSY interest arrangements between banks and troubled developers will be closed down by NAMA, after the agency discovered proper repayments were not being made on two-thirds of loans transferred to it.

The agency has revealed how financial institutions delayed dealing with debt problems by extending loans rather than forcing developers to pay the interest due. NAMA chief executive Brendan McDonagh said it would put developers out of business rather than continue these rolled-up interest arrangements.

He said a detailed examination of the first tranche of loans suggested 12.5% to 15% of them were on these interest roll-up deals.