Richard Bruton (Dublin North Central, Fine Gael)
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Question 295: To ask the Minister for Finance the extent of complex derivative products within the €77 billion being acquired; and the types of derivatives involved. [33731/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The National Asset Management Agency (NAMA) is being established to purchase all land and development loans and certain associated exposures from participating institutions.

It is often the case in financial markets that loans would have certain derivative instruments attached to them. In relation to the €77 billion loan portfolio projected to transfer to NAMA, the NTMA has indicated that the estimated total notional value of these derivatives is €15 billion. These derivatives are typically interest rate swaps or equivalent instruments designed to hedge interest rate payments and the notional value refers to the underlying assets to which the derivatives are related. These derivatives are an integral part of the loan portfolio and are not additional to this amount.

It is important to note that this information is provisional in nature and final figures and further detailed statistics will not be available until a loan by loan assessment has been undertaken.

Richard Bruton (Dublin North Central, Fine Gael)
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Question 296: To ask the Minister for Finance the reason for the reduction in loans acquired from €90 billion to €77 billion; the banks within which the smaller acquisition was decided upon; and the reduction in each case. [33732/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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When I initially announced, on 7 April, the Government's intention to establish NAMA, I indicated that the potential maximum book value of loans for transfer to the agency was estimated to be in the region of €80 to €90 billion. Since then, it has repeatedly been made clear, including on my Department's website and the NAMA website, that this was an indicative figure and that further detailed work and extensive due diligence on the loans books would be needed before final figures could be announced.

Since April, a substantial amount of work and analysis has been undertaken by the interim NAMA. In light of this work, it is now expected that NAMA will purchase loans with a book value of approximately €77 billion from certain institutions. Again I would emphasise that the final figure will not be available until a loan by loan evaluation had been completed.

The current estimate of €77 billion takes account of the decision that a €5 million threshold should apply to loans on the books of the larger banks. The application of this €5 million threshold is expected to generate significant operational efficiencies for NAMA.