Kathleen Lynch (Cork North Central, Labour) | Oireachtas source

I thank Senator Higgins for raising this matter and while these issues can be extraordinarily technical, that is no excuse for shying away from further scrutiny of them.

NAMA's policy is that the sale of all loans and properties by debtors and receivers should be openly marketed to ensure the best price available in the market is achieved in all instances. NAMA enjoys a strong reputation in the market for the quality of information it provides as part of its open market loan sale process and for the transparent and professional manner in which such transactions have been completed to date. Its sales processes are built on international best practice and it uses experienced advisers to ensure transactions are executed to the highest market standards and that bidders are treated equally by mapping out a clear and rigorous process to be followed in each sale. NAMA requires sales agents to prepare final reports and recommendations. Included in these reports is a summary of the marketing campaign undertaken; a list of all parties who expressed interest in the loan or real estate or were contacted during the marketing campaign; a recommendation on whether to accept the terms of the purchaser's offer as the best price reasonably obtainable; confirmation that the agent has reviewed the purchaser's confirmation relating to connected party sales; and a statement disclosing any commercial relationship between the agent, debtor, purchaser or purchaser's ultimate beneficial owners in the past five years and how any actual or perceived conflict of interest was managed during the sales process. This process ensures all interested parties are given equal opportunity to bid for and to purchase loans or properties sold by NAMA or by NAMA debtors and receivers.

The Senator may be aware that the NAMA board is obliged under section 10 of the National Asset Management Agency Act to obtain the best achievable return for the State. Ultimately, over its lifetime, NAMA aims to achieve this by generating sufficient cash from its loans and the property securing them to redeem all its debt and potentially to generate a surplus for the Exchequer. This necessarily involves a constant process of business decision-making as to which assets to sell and when to do so. Having made a decision to sell an asset, the best assurance NAMA can get that it is achieving the best available market price is that it ensures that all sales are openly marketed wherever possible in order that all potential purchasers have an equal opportunity to bid for the asset concerned. This is very much the cornerstone of NAMA's sales processes.

To date, NAMA's strategy in each of its main markets has been to release assets for sale in a phased and orderly manner consistent with the level of demand, the availability of credit and the absorption capacity of each market. In 2013, the Irish market stabilised and commercial yields were at levels which began to attract the attention of serious investors. The patient strategy adopted by NAMA in earlier years has contributed to the robust recovery that is now evident in the market, a recovery which in turn has enabled NAMA to increase the flow of assets for sale and to sell loan portfolios and properties at very competitive prices. Against the backdrop of recovery in the Irish property market, earlier this year, NAMA announced that, in line with its obligations under section 10 of the NAMA Act, it considered that the best financial outcome for the State would be achieved through a managed process of accelerating disposals in an orderly way with the target of redeeming 80% of senior debt - a cumulative €24 billion - by the end of 2016. Following on from the section 227 review of NAMA, which was conducted by the Department of Finance, the Minister for Finance fully endorsed NAMA's strategy of seeking to take full advantage of strong market conditions to reduce the contingent liability on taxpayers represented by NAMA's senior, State-guaranteed bonds. The Minister is fully satisfied that both the strategy informing the NAMA sales process and its requirement that sales are openly marketed and implemented in a professional and transparent manner ensure it maximises the return on its acquired assets so as to repay its debt and therefore reduce and ultimately eliminate the contingent liability of taxpayers.

Having said all that, as with every process that is in place, there will always be people who find ways around it.