Michael McGrath (Cork South Central, Fianna Fail)
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142. To ask the Minister for Finance further to Parliamentary Questions Nos 82 and 83 of 13 April 2017, the number of the 16 potential acquirers initially considered for the portfolio by the loan sales adviser that had originally approached one of the debtors expressing an interest in all or part of the portfolio or that had been originally approached by one of the debtors regarding the possibility of purchasing some or all of the portfolio; and if he will make a statement on the matter. [21071/17]

Michael McGrath (Cork South Central, Fianna Fail)
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143. To ask the Minister for Finance further to Parliamentary Question Nos 82 and 83 of 13 April 2017, the number of the three bidders that selected a competitive bid for the portfolio that had originally approached one of the debtors expressing an interest in all or part of the portfolio or had been originally approached by one of the debtors regarding the possibility of purchasing some or all of the portfolio; and if he will make a statement on the matter. [21072/17]

Michael McGrath (Cork South Central, Fianna Fail)
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144. To ask the Minister for Finance further to Parliamentary Question Nos. 82 and 83 of 13 April 2017, the number of the debtors that were consulted on the compilation of the initial list of 16 potential acquirers for project Tolka on the identification of the nine potential credible bidders, on the selection of the six potential bidders that were engaged with by the loan sales adviser and on the ultimate selection of three bidders that would be invited to submit a competitive bid; and if he will make a statement on the matter. [21073/17]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 142 to 144, inclusive, together.

As I pointed out in my replies to parliamentary questions 82 and 83 of 13 April 2017, NAMA initiated a targeted marketing process for the sale of the Project Tolka portfolio based on its assessment that such a process would yield a superior return to alternative options, as required by reference to its obligations under Section 10 of the NAMA Act. I also pointed out that the advice of NAMA's loan sale adviser, Eastdil Secured, was that such an approach would ensure competitive tension and significantly enhance the proceeds generated for NAMA.

In my previous responses, I also noted that preparatory work in relation to the sale took at least two years. This debtor connection comprised over 180 individual debtors with the majority of the debt concentrated among three principal debtors. Over that period, I am advised there were extensive discussions between NAMA and the principal debtors. I am further advised that, at various points during those discussions, references were made by representatives of the debtor connection to informal approaches which had been made by some investors seeking to purchase particular assets. Given that NAMA no longer has an active engagement with the debtor connection, it is not possible at this time for NAMA to compile accurate data as to which of the original sixteen potential bidders had indicated an interest to the debtor connection in one or more of the assets securing the portfolio.

I am advised by NAMA that one of the three final bidders had expressed an interest to the debtor connection in one or more of the assets securing the loans in the portfolio and that another of the final three bidders had expressed its interest to both NAMA and the debtor connection. I am further advised that NAMA was separately approached directly by one other potential bidder, which was not one of the final three bidders.

I am advised that, in its discussions with the debtor connection, NAMA engaged with representatives of the three principal debtors. NAMA understands that the three principal debtors were in a position to represent the views of most, if not all, of the other debtors. Given that the three principal debtors had the majority of the connection’s debt, it is likely that any investors interested in acquiring assets would have communicated with these principal debtors. In addition, I am advised that, before making a decision to sell the portfolio, NAMA engaged in a debtor representations process. I am advised that this involved writing to all debtors within the connection and requesting their views on NAMA's proposed intention to sell their loans. This provided all debtors in the connection with an opportunity to raise any matters relating to the loan sale including any feedback regarding the selection of potential bidders. I am advised that 253 letters seeking written representations from debtors were issued by NAMA as part of this process and that all responses received were reviewed by NAMA's Credit Committee before the final decision to proceed with the loan sale was made.

Michael McGrath (Cork South Central, Fianna Fail)
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145. To ask the Minister for Finance the details of all transactions, apart from project Tolka, NAMA was involved in whereby the disposal strategy was influenced by approaches made to one or more debtors by potential bidders for all or part of a portfolio; the further details of transactions NAMA was involved in whereby some or all of the debtors concerned would have been consulted by NAMA on the compilation of the list of potential bidders to be engaged with as part of the sale; and if he will make a statement on the matter. [21109/17]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will appreciate that NAMA's engagement with its debtors and any decisions it makes arising from that engagement are confidential matters for the NAMA Board in line with its statutory independent mandate.

The Deputy will be aware that NAMA owns and sells loans and not property. Separately, assets securing NAMA's loans are owned by the debtor or receiver. As such asset sales are performed by the debtor or receiver with NAMA's consent with the proceeds of such asset sales being used to repay the debtor's outstanding borrowings.

I am advised by NAMA that the vast majority of both loan sale transactions conducted by NAMA and asset sale transactions conducted by NAMA debtors or receivers have been openly marketed. Accordingly, consultation with debtors regarding the inclusion of potential bidders has not been a consideration.

I am further advised that loan sales are frequently initiated as a result of credible unsolicited approaches from interested potential purchasers (i.e. reverse inquiries) to NAMA or, on occasion, directly to NAMA debtors. However, if NAMA does not find an approach to be credible it will not pursue such interest as has been the case with many such reverse inquiries.

When assessing reverse inquiries, NAMA's key considerations are whether the proposed transaction maximises the financial return to NAMA and whether the interested party is a credible bidder. If NAMA believes that the transaction would maximise its return and that the party making the reverse inquiry has the financial capacity to purchase the portfolio, NAMA will prepare a formal assessment and following appropriate internal approvals, will seek to initiate a formal loan sales process. The party that made the initial reverse inquiry would typically be included as one of a pool of potential bidders which are given the opportunity to review the portfolio concerned and submit bids if they see fit to do so.

NAMA advise me that, to date, less than one third of the significant loans sales processes triggered by credible reverse inquiries have subsequently been purchased by the party which made the initial approach.

I am advised by NAMA that Project Tolka was unique in terms of the particular targeted marketing approach that was adopted and the level of consultation with the debtor connection as regards bidder selection. As I pointed out in my reply to Parliamentary Questions Nos. 82 and 83 of 13 April 2017, NAMA initiated a targeted marketing process for this portfolio based on the advice of its loan sales adviser, Eastdil Secured. This advice was that this approach would significantly enhance the sales proceeds generated for NAMA by comparison to all other disposal options.

NAMA is prohibited by law from disclosing confidential information in relation to debtors and their assets and is therefore constrained from disclosing the particular considerations which formed the basis for the adviser’s recommendation that a targeted marketing process would maximise the State’s return in this particular instance.