Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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39. To ask the Minister for Finance the value of the National Asset Management Agency cash reserves; his plans for expenditure; the role he has in deciding how cash reserves are spent; and if he will make a statement on the matter. [13116/15]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by NAMA that as at 20 March 2015 its current cash position was €199 million and that in addition it had liquid asset holdings of €768 million.  It is entirely a matter for NAMA, by reference to its statutory commercial mandate, to determine how its cash reserves are applied.  As Minister for Finance, I have no role in the matter.

I am advised that the cash that is generated from asset disposals and other income is applied by NAMA for a range of purposes, including the redemption of its senior debt, interest payments on its senior and subordinated debt, payments arising from its interest rate and current hedging activities, new lending to projects under the control of its debtors and receivers, and to meet its operating costs.

NAMA's ultimate objective is to repay its senior debt and to do so expeditiously.  NAMA's senior debt is a contingent liability of Irish taxpayers and reducing and ultimately eliminating it has to be a major priority at a time when Ireland's sovereign indebtedness is still at very high levels. The Deputy will be aware of the significant progress which NAMA has made in this respect: up to end-March 2015, it had redeemed €17.6 billion of senior bonds, 58% of the amount originally issued. Its target is to redeem at least €24 billion (80%) by end-2016.  NAMA's progress in this regard has been recognised in Ireland's credit ratings upgrades and is a very important contributory factor to the current very favourable positioning of Ireland in the international bond markets.  NAMA has stated that, on the assumption that conditions in the economy and in the property market continue to remain favourable, it expects to be in a position to repay all of its senior debt by 2017/2018 and to repay  all of its subordinated debt. 

The Deputy will be aware also that, in order to maximise taxpayers' return on its acquired loan portfolio, NAMA advances funding for the development and completion of projects.  NAMA has advanced over €1 billion across a range of commercial, retail, leisure and residential development projects in Ireland to date and has indicated that it expects to advance substantial further funding on a commercial basis to help address current and impending residential and office supply shortages particularly in the Dublin area. 

The Deputy may be aware in this respect that NAMA has committed to funding the delivery of 4,500 new homes in the Dublin area in the three years to end-2016 and facilitating the timely delivery of key Grade A office, retail and residential space in the Dublin Docklands Strategic Development Zone (SDZ) and the wider central business district. NAMA has established dedicated Docklands SDZ and Residential Delivery teams to oversee the funding of these two important projects.  

In addition to repaying NAMA's debts and advancing development capital to enhance its assets, NAMA uses its cash reserves to meet its on-going funding requirements and operational expenses.  In this context I am advised the NAMA Board considers it will not require additional resources from the Exchequer over its lifetime.  The Deputy will note that, as outlined in the Section 53 Annual Statement, NAMA's operating costs as a percentage of cash generated are less than 3%, which is substantially lower than that of comparable entities internationally where the costs to cash ratio has typically averaged 6%.