Belfast Telegraph

Loans worth €360m are transferred to 'bad bank'

By Margaret Canning

Northern Ireland loans worth €360m have been transferred into the Republic's 'bad bank,' the National Asset Management Agency (NAMA).

Some 3% of loans worth €11.9bn absorbed by NAMA in the second tranche of transfers related to debts of borrowers in Northern Ireland.

A sum transferred by Anglo Irish Bank may not include some of the bank's loans to Belfast-born developer Paddy McKillen who is challenging the agency in the courts.

Mr McKillen has loans totalling €800m with Anglo, earmarked for transfer in the second tranche.

His challenge to NAMA is to be heard by Dublin's Commercial Court in October.

NAMA refused to confirm whether McKillen's loans were included in the second tranche.

It had originally planned to buy loans with a face value of €8bn from Anglo Irish in the second tranche. But the agency revealed that it had this week purchased loans with a face value of €6.75bn from Anglo, paying €2.57bn or a discount of 61.9% - up on the 55% discount on its first tranche.

The second transfer leaves Nama in control of 35 Irish hotels though the second share of transfers also shows a surge in non-Irish debt.

Just 50% of the loans sent over in the second batch were linked to Irish projects, compared with a 66% contingent in Tranche 1.

A quarter of the entire €11.9bn sent across was secured on 31 hotels, including 22 in Ireland. The picture is in stark contrast to the first tranche of transfers, when just 4% of the €27.2bn transferred over was secured on hotels.

The latest figures are understood to be inflated by the transfer of a sizable debt relating to an unidentified UK hotel group.

The extra 22 Irish hotels brought into NAMA's reach by the latest transfers brings the total number of NAMA-linked hotels to 35, while NAMA also has a claim on 13 non-Irish hotels.

The Republic's bad bank doesn't own or directly operate the hotels, but it can have a major say in their future.

Developers will be required to include detailed strategies for the hotels when they present their business plans to NAMA over the coming months.

NAMA will have the power to interrogate aspects of the plans, and can also suggest borrowers sell their hotels in order to pay off debts.