Belfast Telegraph

US buyer of Nama's NI property loans portfolio writes off €4.1bn

By Staff Reporter

The US financial firm that bought the controversial Project Eagle property portfolio in Northern Ireland has written off more than €4.1bn from its face value.

The news comes just days after a high-powered Dail committee published a searing report into the affairs of the National Assets Management Agency (Nama), the 'bad bank' established in the Republic to handle toxic property-related loans in the wake of the 2008 financial crash.

US property fund Cerberus acquired the Project Eagle portfolio - which was made up of loans made to property developers in Northern Ireland - from Nama for €1.6bn.

The loans had a face value of €5.7bn. In the wake of Cerberus' acquisition of the portfolio, serious concerns arose about the integrity of the conduct of the sale, and whether the best possible price for the assets had been achieved for the public purse.

A report by Dublin's Comptroller and Auditor General (CA&G) found two of Nama's valuations of its Northern Ireland loans in late 2013 and early 2014 underestimated their value. Yesterday, a Dublin Sunday newspaper reported that the US financial giant had reached agreements with many of the property developers who were responsible for the loans contained in the Project Eagle portfolio, amounting to a writedown of €4.1bn on the face value of their original loans.

The Sunday Business Post said that "the face value of the loans would be as much as twice the value paid, enabling the company (Cerberus) to offer writedowns and the release of personal guarantees as part of consensual debt resolution agreements".

A Dail Public Accounts Committee report published last week said that Nama had been unable to demonstrate that it got value for money for the Irish State in relation to the price achieved.

Nama has consistently defended the organisation's conduct in the Project Eagle sale, insisting that it got a very good price for its Northern Ireland portfolio.

"The commercial reality is that the Northern Ireland property market and many regional markets in northern Britain, where many of the portfolio's underlying assets are located, have been challenging and are likely to remain challenging for the foreseeable future," it said.

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