namawinelake 

 May 3, 2011 at 11:49 am 

Laura Noonan in today’s Irish Independent reports that of the 30 top NAMA developers, 18 have signed “or are close to signing” a memorandum of understanding with the agency and these 18 are seen as being “relatively safe” (presumably that’s a direct quote from NAMA). Of course the reported phraseology might mean that all 18 of the developers have yet to sign, and “close to” is a very imprecise term. In addition to the signatures of the developers, the memoranda of understanding will need be signed by NAMA, which might require the agreement of the NAMA board, and potentially the spouse of the developer. And after the memorandum of understanding comes the Heads of Terms and finally a full agreement, and these two subsequent documents will also need to be signed by the developer, NAMA and potentially the developer’s wife. Next Tuesday will be the 10th of May, 2011 and the first anniversary of the completion of the transfer of the first Tranche of loans to NAMA. Now the first 30 developers have an average loan exposure of €900m and the business plans will not be straight-forward to say the least. That said, it is difficult to conclude anything other than NAMA is well behind schedule in its agreements with developers.
As for the remaining 12 developers in the Top 30, apparently five are facing foreclosure action by NAMA because the memoranda of understanding have not been agreed. The other seven are presumably already subject to foreclosure action.
And here’s where it starts to become very messy. NAMA does not generally disclose the identity of its developers – the agency stubbornly stuck to its guns last November 2010 at the Oireachtas Committee of Public Accounts hearing where Deputy Roisin Shortall in particular pressed NAMA for names of the Top 10 but the agency did not yield and asserted that such information was confidential. So we don’t definitively know the identity of the Top 10 or the Top 30. That said, Ireland being Ireland, we have had what seemed like well-informed reporting which speculated about the Top 30 and it is that reporting (particularly this and this article) which forms the basis of the table above. A further complication is that the Top 30 developers have extensive portfolios of property that might be split across many companies and some of those companies are subject to receivership and some aren’t.  For example, the only company with which David Courtney an Jerry O’Reilly have been associated which is subject to a NAMA receivership is Radora Developments which was responsible for the Elm Park development.
NAMA has foreclosed on quite a number of developers not on the above list. Jim Mansfield is not there, for example; reporting suggests that his debt to NAMA is “tens of millions of euro” which might mean he was too small for the Top 30. Jim however owes loans to other banks and Bank ofScotland(Ireland) foreclosed on the Citywest hotel complex last year. The implication from Laura’s reporting is that NAMA has foreclosed on seven of the Top 30 and that being the case, I would say those seven refer to Liam Carroll, Bernard McNamara, Derek Quinlan, Paddy Shovlin, Paddy Kelly, David Courtney/Jerry O’Reilly (Radora) and Ray Grehan (where the receiver has been “stood down”, temporarily perhaps). In addition, McInerney is in examinership and its appeal against the withdrawal of that examinership is scheduled to be heard at the Supreme Court this week. There was a report about receivership in respect of Sean Dunne in the Irish Sunday Times (not available online) but that seems to have been denied by Sean’s spokesman and nothing has come up in the Iris Oifigiuil.
So we don’t know the identity of the Top 30, we probably just about know the receiverships affecting the Top 30 and we certainly don’t know the identity of the 18 that NAMA claim have signed, or are close to signing, agreements. We most certainly don’t know the identity of the five that may be facing imminent foreclosure.
As always with these pieces, I get concerned that the media can get used by NAMA to wave its stick at recalcitrant developers – since NAMA doesn’t disclose confidential information and not all developers are networked with their competitors sufficiently to know the status of the negotiations with NAMA, there is a concern that developers will read articles like those in today’s Independent and conclude they are risk. Which they might be. Though they might also conclude that NAMA’s apparent failure to sign the three documents that comprise an agreement with a single developer, one year after absorbing the first tranche, might mean there are more general difficulties at the agency.

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Comment:

I would question the expertise of the NAMA staff, I would also question the recruitment methods and the safeguards that are or are not in place that would stop the poacher from becoming game keeper so to speak? Who is safeguarding the taxpayer’s interest in this new lottery carrousel for the chosen few ?  

Related Articles

• http://www.examiner.ie/breakingnews/ireland/nama-appoints-receiver-to-mansfield-assets-502113.html (thepressnet.com)
• NAMA appoints receiver to another Top 20 developer bringing its tally to seven (namawinelake.wordpress.com)
• NAMA provides progress update and claims PTSB/ESRI index is not realistic (thepressnet.com)
• Avalanche of receiverships as NAMA enters its enforcement phase (thepressnet.com)
• NAMA gives us a new collocation – “standing down a receiver” (namawinelake.wordpress.com)