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Nama Northern Ireland


PJ1977

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HOLA441
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HOLA448

Mr Stewart said estimates suggest that the normal market for land sales in NI was about £100m in the years 2000 to 2005. But that spiked to £750m in the years 2006 and 2007.

Imho we already had a bubble in 2000 to 2005 , after that I think historians will have to make up a new word to describe what happened

:ph34r:

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HOLA449

Imho we already had a bubble in 2000 to 2005 , after that I think historians will have to make up a new word to describe what happened

:ph34r:

From what I can see there are three main points to be drawn:

Nama's impact on the residential Market will be minimal as we don't have anything like the stock overhang that the Republic does.

The impact on the commercial market is much, much greater. Nama will hold loans against properties which represent five times the annual transaction value of the entire NI commercial market. Given that Nama wants to exit in 10 years it immediatley becomes the prime force in that market. If they're aiming for disposals who will buy? My guess is that the sort of institutions on the other end of recent Sam Morrison deals will figure very largely.

Some of the more remote landbanks will probably have their value written down by 85% plus and end up as agricultural land.

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HOLA4410

From what I can see there are three main points to be drawn:

Nama's impact on the residential Market will be minimal as we don't have anything like the stock overhang that the Republic does.

The impact on the commercial market is much, much greater. Nama will hold loans against properties which represent five times the annual transaction value of the entire NI commercial market. Given that Nama wants to exit in 10 years it immediatley becomes the prime force in that market. If they're aiming for disposals who will buy? My guess is that the sort of institutions on the other end of recent Sam Morrison deals will figure very largely.

Some of the more remote landbanks will probably have their value written down by 85% plus and end up as agricultural land.

Also bad news for all those involved in the agricultural land bubble

:lol::lol:

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The impact on the commercial market is much, much greater. Nama will hold loans against properties which represent five times the annual transaction value of the entire NI commercial market. Given that Nama wants to exit in 10 years it immediatley becomes the prime force in that market. If they're aiming for disposals who will buy?

the security does not necessarily have to be sold, merely refinanced. More likely if there is even a modest recovery in the Market. We are still in e credit crunch. If finance availibility was half way normal some liquidity would return and the Market could establish a pattern and some confidence return

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the security does not necessarily have to be sold, merely refinanced. More likely if there is even a modest recovery in the Market. We are still in e credit crunch. If finance availibility was half way normal some liquidity would return and the Market could establish a pattern and some confidence return

The difficulty with refins is that the bubble values and lending practices are not coming back so therefore the developer/ investor is still going to have to come up with a lot of cash to reach an acceptable LTV ratio.

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The difficulty with refins is that the bubble values and lending practices are not coming back so therefore the developer/ investor is still going to have to come up with a lot of cash to reach an acceptable LTV ratio.

I agree but some years down the line there could be changes in that.

There is also the theoretical option of beating NAMA's valuation of your loan, your bank gets more and you owe less.

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Thanks for the info R+R - I thought it was said on here that it was mainly commercial loans that were going into NAMA

It is mainly commercial but when Peter Stewart of Nama last spoke about NI he said that 10% of the £3.5bn loans related to WIP which was mainly housing.

However the number, value and character of loans which Nama is taking on has probably changed significantly since then. When Stewart spoke Nama was only planning to take BoI and AIB land and development loans where the borrowers total exposure to one of those institutions was £5m+, that floor was briefly raised to £20m+ but as part of the bailout Nama will now be taking over sub £5m loans from those institutions. That means that the farmer who borrowed £1m from First Trust to build three houses in the bottom field will now be Nama-bound alongside the big boys.

One obvious Nama residential candidate is Dermont, the Herbert-McGinnis JV which borrowed £60m from BoI to buy a bunch of Taggart sites off the administrator.

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PJ you seem to have a grasp of the bigger picture. Does the Bailout mean that the whole picture has changed in NI with regard to residential properties and NAMA?

It will mean that Nama has more small residential developers on their books than originally planned but Stewart's point still stands that NI does not have the same overhang of residential property as the Republic. The other factor here is that Ulster Bank had what I guess to be a market leading position in the small development sector and it is not a Nama 'participating institution.'

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Also if you want to play a really dull game of 'guess the Nama transfer' look at the filings of property companies and see if the security on particular assets has suddenly been beefed up, even though the bank financing was in place years ago. It's a symptom of Nama reviewing the (sometimes sloppy) security for loans they are taking over. A recent examples is a letter of undertaking from Jermon to First Trust in relation to an asset in Poland.

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HOLA4421

Just read the speech and noticed a nasty bias. Maybe others already know this but I don't like the way they blame the developers and describe bankers as just 'over-exuberant'. The Bankers have alot more to blame for than the developers, but the ultimate fault lies with de-regulation.

Nama's position is therefore to keep the bankers in business at the expense of the tax payer.

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HOLA4422

It is mainly commercial but when Peter Stewart of Nama last spoke about NI he said that 10% of the £3.5bn loans related to WIP which was mainly housing.

However the number, value and character of loans which Nama is taking on has probably changed significantly since then. When Stewart spoke Nama was only planning to take BoI and AIB land and development loans where the borrowers total exposure to one of those institutions was £5m+, that floor was briefly raised to £20m+ but as part of the bailout Nama will now be taking over sub £5m loans from those institutions. That means that the farmer who borrowed £1m from First Trust to build three houses in the bottom field will now be Nama-bound alongside the big boys.

One obvious Nama residential candidate is Dermont, the Herbert-McGinnis JV which borrowed £60m from BoI to buy a bunch of Taggart sites off the administrator.

Don't know all the facts on that one but it was some sort of a deal to build out the distressed Taggart Assets.

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PJ you seem to have a grasp of the bigger picture. Does the Bailout mean that the whole picture has changed in NI with regard to residential properties and NAMA?

The word 'bailout' is a bit of spin. I'm sure PJ can confirm that NAMA is anything but a 'Bailout' for the developers. In my view many performing loans will be turned into non-performing loans by NAMA's involvement. The banks don't give the impression they are being bailed out. In fact they would say say they are being Royally scr*wed over by NAMA (But few care about that). I don't think the taxpayer is being bailed out as they, and their kids have to pay for all this. The only people being bailed out are the bonds-people. A list of Anglo bondholders were listed a few months back. Some of the names would register with the Tinfoil Hat Belgrade.

What will NAMA change in regards to the NI Residential Market? You ask.

NAMA, at its worst will mean that most who go in wont survive the 'cash sweep'. Meaning most of the developers who should have survived this simply wont. Most of the developments that should have been developed out over the next few years will be mothballed with attempts to sell off some.

At its best the introduction of NAMA will make no difference to the companies involved. With meirly the developers who owes £xm to the participating banks now owing it to NAMA.

I imagine, what we will get is something in-between. If they push too far towards the former they will fail. If they veer too close to the latter they will not spill enough blood to keep the people happy.

So what happens the market for resi' property under each circumstance? If they curtail development of new properties then supply will be slowed. I am a firm believer that the price of property has more to do, in the short term, with the supply of credit and sentiment than the supply of properties. Therefore I have to say that the reduction of supply will have little short term effect on prices. However in the long term, it must.

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belfast I was referring to this part of PJ 's post

I took that as meaning the EU Bailout of Ireland rather than NAMA bailing out the developers. I was trying to understand what this meant for smaller loan holders who got transferred into NAMA now.

I think Belfast VI nailed it with the opinion that the effect will either be neutral (if loans are performing) or negative (as Nama doesn't seem minded to continue the banks 'extend and pretend' policies.) Certainly I imagine small resi developers are not going to be first in the queue when Nama is distributing it's 5bn euro development fund.

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