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National Asset Management Agency (“NAMA”) UK Phase Roll Out
The now much publicised NAMA was established by the Department of Finance in 2009 with a view to restoring stability to the Irish banking system, in the aftermath of the global financial crisis. It will purchase land and development loans, as well as associated commercial loans with a nominal value of approximately €80 billion from the relevant Irish institutions, for an estimated purchase price of €54 billion. The purpose is to free up the institutions’ capital from long terms loans. NAMA will then seek to maximise the value of, and recover, the loans.
About €20 billion of NAMA’s portfolio constitutes loans secured against UK property, including some high profile London properties such as Battersea Power Station. There has been some concern in the UK that a quick sale will be made of such property, at depressed prices. However, given NAMA’s objective of maximising the value of loans, it is hoped that such concerns are unfounded. While it is inevitable that some Irish investors will sell up and leave the UK market in the current economic climate, it is also hoped that the mere existence of NAMA will not fuel such a process.
UK legal advisors were given an opportunity to tender for the provision of legal services to NAMA. This tender process closed on 30 April 2010, though the results have not yet been released.