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Nama Paying 54 Bn Euro For 77 Bn Euro Worth Of Loans

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NO!

NAMA are paying 54Bn for assets currently valued at 47Bn.

77Bn was the peak market value - current value is 47Bn.

The govt are overpaying by about 15%

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NO!

NAMA are paying 54Bn for assets currently valued at 47Bn.

77Bn was the peak market value - current value is 47Bn.

The govt are overpaying by about 15%

You are assuming 100% loans. I would suggest these are 80 to 90% loans so the original land was valued at peak say 90bn

Valued now at 47bn =47% drop from peak.

Yea they are paying 15% more than the land is worth today, people feared this would be more. However the residual value of land is worth more than the Open Market Value. The big question is -Is the current valuation of 47bn accurate?

So the banks will have to take a write down of 23bn Euro amongst them and the developers are loosing my estimated value of 13bn equity.

However if this works the shareholders are saved as the shares, which were at historical lows will rally. Hope they appreciate it.

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You are assuming 100% loans. I would suggest these are 80 to 90% loans so the original land was valued at peak say 90bn

Valued now at 47bn =47% drop from peak.

Most would be on an 85% LTV. However to clear up matters. Lenihan is selling it like a 30% discount but this is incorrect.

It is injecting 54bn into the banks on collateral worth according to their estimates 47bn. However 9bn of the loans is tied to roll over interest loans from developers which likely are worth nothing or very little. According to the 100 page document with little in it of any value, it also appears that 80% of the loans are tied to development land which could revert to agricultural status.

So taking the wrapper interest as useless collateral, government is really downgrading less than 20.58%!!

It's all government spin that will come out in the wash.

Edited by md23040

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Most would be on an 85% LTV. However to clear up matters. Lenihan is selling it like a 30% discount but this is incorrect.

It is injecting 54bn into the banks on collateral worth according to their estimates 47bn. However 9bn of the loans is tied to roll over interest loans from developers which likely are worth nothing or very little. According to the 100 page document with little in it of any value, it also appears that 80% of the loans are tied to development land which could revert to agricultural status.

So taking the wrapper interest as useless collateral, government is really downgrading less than 20.58%!!

It's all government spin that will come out in the wash.

I agree it is all spin and they should have nationalised the banks but I don't agree 80% of the land will be de-zoned. Thats spin. Yes there is too much zoned down south. If any is de-zoned it will be re-zoned when it is needed for building on - so same thing anyway.

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over 4 billion euro's for developments in NI :o

Six percent, or 4.62bn euros, of the total loans made by the banks are for developments based in Northern Ireland
Edited by subby

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I agree it is all spin and they should have nationalised the banks but I don't agree 80% of the land will be de-zoned. Thats spin. Yes there is too much zoned down south. If any is de-zoned it will be re-zoned when it is needed for building on - so same thing anyway.

Eighty percent of the loans swallowed by NAMA are development land related, of this some will revert to agricultural status again. Not 80% or anywhere near. Originally expressed badly.

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Eighty percent of the loans swallowed by NAMA are development land related, of this some will revert to agricultural status again. Not 80% or anywhere near. Originally expressed badly.

are we saying then they might of taken on something like "60 bn worth" of zoned land?

i read 15% of homes in the southh are empty. with this, the young disappearing abroad if they have sense.

i could be a very old man before there is demand for this land to be built on

weebobby, 27.

Edited by getdoon_weebobby

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Everyone is missing the real story here.

Say a developer had €1 million of loans before the property bubble imploded. In somes cases, he might not have made a repayment to the bank in 3 years. All that time, the interest due was being added to the outstanding amount and compounded. Now, suppose that the collateral behind this loan (development land) has halved. That means the developer has liabilities of ~€1.2 million, with collateral of €500,000. No one who gets into this situation ever pays debts that are this size.

Looking at the bigger picture, NAMA has just taken on €9 billion of the "rolled-up" interest onto its books. None of this €9 billion will ever be paid back. So that means that Ireland is facing a €9 billion loss before they even get into the meat and bones of trying to recoup money from these the other €60 billion of loans.

The Irish Taoiseach has just sold his citizens into a decade of taxation bondage.

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The Irish Taoiseach has just sold his citizens into a decade of taxation bondage.

Could be a lot more imo, that's the big story. For a single person or a country if you live the high life way beyond your means for 10 years be prepared to live in poverty for the next 10 to 20 years.

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Everyone is missing the real story here.

Say a developer had €1 million of loans before the property bubble imploded. In somes cases, he might not have made a repayment to the bank in 3 years. All that time, the interest due was being added to the outstanding amount and compounded. Now, suppose that the collateral behind this loan (development land) has halved. That means the developer has liabilities of ~€1.2 million, with collateral of €500,000. No one who gets into this situation ever pays debts that are this size.

Looking at the bigger picture, NAMA has just taken on €9 billion of the "rolled-up" interest onto its books. None of this €9 billion will ever be paid back. So that means that Ireland is facing a €9 billion loss before they even get into the meat and bones of trying to recoup money from these the other €60 billion of loans.

The Irish Taoiseach has just sold his citizens into a decade of taxation bondage.

whilst the amount of roll up is astonishing what you are saying is correct.

Taking your chap with the £1m loan on land that he hoped was worth more at the time. I.e likely to have had a loan to value of 85%. In the NAMA case they say the debts, including roll up (all in the 54bn) have fallen in value by 40%. So our chaps asset is only worth £600k. NAMA is taking over the loan at 15% above this say £750k. Your chap still owes £1m.

However the residual value of the land, when all is build out and sold is worth more than the Open Market Value and with a bit of inflation over the 10 years or so that these projects will take the bank/NAMA may well recover the money thes have invested. Who knows?

The thing that nobody is looking at is 'the current day valuations' that have been placed on the NAMA assets. I think it is 47bn Euro. Without knowing anything I would suggest this is double the real figure as this was the easiest card trick to pull.

As for the decade of bondage - the only alternative -Nationalization (which I favour) would mean pretty much the same.

Edited by BelfastVI

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