Mr. Seamus McCarthy:

NAMA's borrowing cost in June 2013 was around 1.2%. Effectively, this was the cost of its senior bonds. The interest rate on its subordinated bonds, of which there is a smaller amount, would have been about 5.6%. One could say that taking the interest rate on the 95% senior bonds and the 5% subordinated bonds, one would get a blended cost of capital. As at June 2013, and things did not change that much between June and December 2013, NAMA's cost of capital was very low. NAMA also had a hedging strategy for its interest rate which was protecting it against any sudden increase in the interest rate on its bonds. NAMA discussed this in the June 2013 paper. Effectively, NAMA had ensured that its interest rate would not go above 2%. The difference between that and the 5.5%, which was the discount rate, reflects the risk in the portfolio. Between a figure of around 1.2% and 5.5%, one is looking at around 4.3% or 4.4% of a risk premium, which is relatively generous. The potential purchasers would have been looking at bank interest rates, for the element that they borrow from banks, of around 4.5% or 5%. The equity proportion would have an expected higher rate of return.

Again, with a blended rate of-----