PaulHoughton
Registered User
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- 68
can anyone explain this to me?
NAMA will purchase property loans from the banks at a discounted rate. It will issue the banks government bonds in exchange for these non-performing loans. The banks get some sovereign bonds, an asset writedown and -if they need it- more capital because "we're all in this together".
The bonds will be interest bearing and the NAMA will pay the interest from its 'income stream'.
NAMA is then left holding loans secured on property held by developers who have not been paying interest to their banks. They are not paying because either they are insolvent or they have chosen not to pay in the hope of a bailout.
One group of developers will never pay as they are bust while the others must be made to pay by repossession and forced sale - resulting in a flood of property assets onto the moribund irish property market.
Yet NAMA talks confidently about its future 'income stream' as if the loans are performing.
I don't understand the logic. Can anyone explain?
NAMA will purchase property loans from the banks at a discounted rate. It will issue the banks government bonds in exchange for these non-performing loans. The banks get some sovereign bonds, an asset writedown and -if they need it- more capital because "we're all in this together".
The bonds will be interest bearing and the NAMA will pay the interest from its 'income stream'.
NAMA is then left holding loans secured on property held by developers who have not been paying interest to their banks. They are not paying because either they are insolvent or they have chosen not to pay in the hope of a bailout.
One group of developers will never pay as they are bust while the others must be made to pay by repossession and forced sale - resulting in a flood of property assets onto the moribund irish property market.
Yet NAMA talks confidently about its future 'income stream' as if the loans are performing.
I don't understand the logic. Can anyone explain?