Project Eagle: Five key flashpoints in C&AG-Nama row

There are five key differences between the Comptroller and Auditor General (C&AG) report into the Project Eagle sale of Northern Irish loans and the Nama board’s view of what took place, mainly relating to the value of the loans.

Probable loss

C&AG Séamus McCarthy’s report states that the Project Eagle sale left the State with a probable sterling £190 million (€220 million) loss.

Not so, says Nama, which says those figures are based on incorrect assumptions used to calculate what the property loans were worth against what they might be worth in the future.

‘Highly speculative’

The C&AG report bases its financial finding on the difference between Nama's own calculation that the loans were worth £1.49 billion at the end of December 2013 and the £1.3 billion at which it sold them to US firm Cerberus.

Nama responds that the conclusion that it could have got a better price is “hypothetical and highly speculative” and the report has no evidence to support this.

Frank Cushnahan

The C&AG argues that the involvement of Nama's former adviser Frank Cushnahan with an aborted bid by US company Pimco should have raised concerns for the agency.

Nama says the report establishes no link between Cushnahan’s actions and the sale’s outcome or the price it achieved.

Lawyers’ role

McCarthy says Nama should have considered the implications for the sale of the involvement of lawyers Tughans and Brown Rudnick with Pimco and then with Cerberus.

Nama says that contrary to recent media reports, there were no findings of irregularity in the sales process itself.

Discount rate

The C&AG says Nama used a discount rate of 10 per cent to calculate the difference between what the loans were worth and what they might be worth, more than the 5.5 per cent that it normally used for such deals.

Nama rejects this and says the C&AG is comparing loans tied to quality properties in London and Dublin with those linked to poorer assets in Northern Ireland.