Michael McGrath (Cork South Central, Fianna Fail)
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1. To ask the Minister for Finance when the National Asset Management Agency will wind up its operations; if he will provide an estimate of the financial outturn for the taxpayer from NAMA; if he envisages any further role for NAMA in the medium term beyond its current mandate; and if he will make a statement on the matter. [4823/15]

Michael McGrath (Cork South Central, Fianna Fail)
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The purpose of this question is to establish when the Minister expects the National Asset Management Agency, NAMA, to wind up its operations, the current estimate of the financial outturn from NAMA and whether he envisages any further role for NAMA beyond its current mandate and perhaps beyond its current expected lifespan.

Michael Noonan (Limerick City, Fine Gael)
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I thank the Deputy for the question. I am advised that the NAMA chief executive, in his opening address to the Committee of Public Accounts in December 2014, stated that NAMA is aiming to redeem a cumulative 80% - that is €24 billion - of its senior debt by the end of 2016 and that it hopes it will have redeemed all of it by the end of 2018. He stated that those targets were predicated on conditions in the Irish market remaining favourable and on NAMA being in a position to retain sufficient specialist staff to enable it to generate the optimal financial return from the realisation of its residual loan portfolio.

I am also advised that the chief executive indicated at a meeting of the joint finance committee in October 2014 that NAMA projected a financial surplus of the order of €500 million over its lifetime. I understand that this estimate was based on financial projections as at end-June 2014 and that an updated projection is currently being prepared as part of NAMA's end-2014 impairment review.

The Deputy will be aware that, in the context of the section 227 review of NAMA carried out in 2014, I agreed to a set of strategic priorities with the NAMA board. In addition to its commitment to redeem a minimum of 80% of its senior debt by the end of 2016, the NAMA board also undertook to facilitate the timely and coherent delivery of key grade A office space, retail and residential space within the Dublin Docklands strategic development zone and Dublin's central business district and to maximise the delivery of residential housing units in areas of most need.

Given that these commitments were agreed with NAMA only in July 2014, it is too early to speculate as to what date in the future NAMA will have made sufficient progress on its objectives as to warrant consideration of its dissolution.

It should be noted that NAMA's progress in repaying its debt - it has already repaid more than 50% of its senior bonds - has been a very important contributory factor in the recent upgrades of Ireland's credit rating. Of particular importance has been the manner in which NAMA has not just consistently met but has exceeded its targets.

Additional information not given on the floor of the House

NAMA's primary objective is, as the Deputy is aware, to repay its senior debt, the €30.2 billion issued to the banks in 2010 and 2011 as consideration for its acquired loans, and to recover its carrying costs and advances to debtors. It is NAMA's view, based on the assumption that current market conditions will be sustained, that it will meet this primary objective and that it will also repay its subordinated debt.

The additional commitments agreed by the NAMA board in July 2014 did not involve any change to NAMA's mandate. I am not currently contemplating any additional role for it beyond that existing challenging mandate. Its role in relation to both the Dublin Docklands strategic development zone and residential development is entirely consistent with its mandate of achieving the best financial return for the State from the loans acquired by it and the active management of the underlying security. The provision of development funding to enhance the ultimate disposal value of assets securing its loans is a key part of its mandate. NAMA has to date advanced, on a commercial basis, more than €1 billion in development funding for Irish projects and has indicated that, if required, it could advance up to a further €3 billion to support delivery of commercial and residential accommodation.

Michael McGrath (Cork South Central, Fianna Fail)
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I welcome the fact that it appears that the contingent liability which the State is carrying in respect of NAMA will not now be required because it appears NAMA will at least break even and hopefully generate a surplus for the Exchequer over time. When, in the Minister's view, can we expect that NAMA will have concluded its operations? NAMA's chairperson indicated that it hopes to have redeemed all of the senior debt by 2018. Does the Minister envisage that is around the timeframe when NAMA will have completed its work? There were reports last weekend that NAMA is about to sell €8 billion of loans in respect of its debtors. Can the Minister confirm if that is accurate? Also, can he give us any further information about the financial outturn he is expecting from NAMA?

Michael Noonan (Limerick City, Fine Gael)
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There is no change in the indicative dates given by the chairman and the chief executive and it is hoped, market conditions permitting, that NAMA will have disposed of all its assets by 2018. It expects also to show a surplus at the end of that period. The stories there were a few years ago of a black hole emerging in NAMA are not correct. As the Deputy said, it will at least break even but, in all probability, it will now have a profit of the magnitude I indicated in my reply. That means then that there is no contingent risk for the State coming from NAMA, which is one of the reasons our credit rating has been increased substantially.

As a type of special project, I agreed with NAMA last year that it would develop the docklands because there is a shortage of significant and much needed office space between the canals in Dublin in particular. NAMA is moving very quickly now to help to fill that gap in the property portfolio in Dublin.

Michael McGrath (Cork South Central, Fianna Fail)
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As the Minister knows, about 90% of what NAMA has sold has been bought by US private equity funds. Their intentions in the medium term for the assets they have acquired from NAMA remains to be seen. Will the Minister speak about reports that NAMA is preparing to sell €8 billion worth of loans? If such a large tranche is sold, the loans could be bought by foreign investors, which would have a fundamental impact on the nature of the relationship between the debtors and their lenders. Many of them are viable trading businesses, despite having an overhang of property-related debt. Will the Minister confirm to the House if the reports that NAMA is preparing to sell €8 billion worth of assets are accurate? Some markets sources are indicating that there has been a change of attitude within NAMA, that there is now a much greater emphasis on disposing assets quickly and that there is, perhaps, some pressure on NAMA to wind up its operations more quickly than was originally intended. Will the Minister confirm, in respect of the €8 billion worth of assets, if NAMA is making plans to sell such a large tranche?

Michael Noonan (Limerick City, Fine Gael)
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There is no pressure from me or the Department of Finance. What I have outlined in the House is the mandate for NAMA which it is fulfilling very satisfactorily. As market conditions and its perception of them change, NAMA speed up or slows down disposals. I understand market conditions are very good and that NAMA is speeding up disposals. I do not know where the figure of €8 billion came from, but it is obviously a punt in the dark. It is true that there was a speeding up of disposals in 2015 and at the back-end of 2014. However, this was not in response to any instruction from me. It is not my business how the property market is. NAMA is trying to match disposals to the best opportunities in the market and it considers now is a good time to speed up. However, the date for full disposals remains 2018. NAMA's role as a developer of the Dublin docklands and for office and residential projects has allowed it to retain its legal position, but an additional mandate is now being emphasised.