Seán Fleming (Laois-Offaly, Fianna Fail)
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Question 82: To ask the Minister for Finance if any loans were transferred from the banks to the National Asset Management Agency at full value without a discount, especially in cases in which a loan was being fully paid back, the amount outstanding was relatively small in relation to the underlying value of the property, the payment record to date had been excellent, there was no expectation that the loan would not be repaid in full in view of the track record of payments to date, or there was a prospect of clearing the loan in the short term; and if he will make a statement on the matter. [22046/11]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by NAMA that certain loans have transferred to NAMA for consideration which represented 100% of the nominal loan balance, i.e. without a discount. The agency also advises that a small number of the loans transferred would have the features outlined by the Deputy, namely

1) where the amount outstanding was relatively small in relation to the value of the underlying property; or

2) where the repayment record on the loan had been excellent up to the point of acquisition by NAMA; or

3) where there is a reasonable expectation that the loan will be repaid in full; or

4) where there is a reasonable expectation that the loan can be cleared in the short term (and indeed there have been such loans).

However, NAMA also informs me that the discounts were primarily based on the underlying value of the property which was the security for the loan and that the performance status of the loan was not a major factor in the valuation methodology which was approved by the European Commission. The rationale for this was that, in the case of a loan portfolio which was largely distressed, the value of the underlying collateral was the best estimate for the ultimate realisable value of the loan.