Michael Noonan (Limerick City, Fine Gael)

The debt repayment goals for the National Asset Management Agency, NAMA, have been set by its board and include several targets set out over three-year periods. These are a repayment of 25% of NAMA senior bonds by the end of 2013, 50% by the end of 2016, 90% by the end of 2019 and full repayment of NAMA senior bonds by the end of 2020. These targets are based on a combination of expected asset sales, interest and other income receipts from NAMA debtors and the utilisation of NAMA's cash reserves. NAMA has repaid €3.25 billion of NAMA senior bonds, €1.25 billion in 2011 and €2 billion to date in 2012. This amounts to almost 11% of the NAMA senior bonds in issue.

It is important to consider the repayment of NAMA debt is not the only determination in deciding on the use of NAMA's cash balances. By the end of the first quarter 2012, NAMA had generated € 7.2 billion in cash receipts from borrowers since its inception. Under the National Asset Management Agency Act 2009, NAMA may invest funds to protect or enhance the value of the collateral securing its loans. Where it considers that it makes commercial sense to do so, NAMA may advance funds to projects, including projects located in Ireland, under the control of its debtors or receivers.

NAMA's board recognises that its success in meeting its objectives is closely linked to the performance of the economy in general. A vibrant domestic economy means increased demand for the property assets which secure NAMA's loans. NAMA has advised that it recognises its role in making whatever contribution it can towards instigating a renewal of sustainable activity in the property market in Ireland. I am advised by NAMA that it plans to invest substantial funding over its lifetime in preserving and enhancing the assets that secure its loans, including significant investment in assets located in Ireland, and that a substantial portion of its cash reserves will be used for this purpose. The chairman of NAMA recently announced plans to invest €2 billion by 2016.

Additional information not given on the floor of the House

Acting on my direction, on 29 March 2012 the NAMA board approved the short-term facility with Irish Bank Resolution Corporation Limited, IBRC, collateralised by an Irish Government bond. The €3.06 billion facility was drawn on the 3 April 2012 and repaid on 20 June 2012.

The board of NAMA has primary responsibility for setting strategy in NAMA and for determining and implementing any proposed changes. It is, therefore, a matter for the board to develop and have implemented an appropriate strategy for the management of the cash reserves and assets of the agency.

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