A GROUP of property investors and developers with assets of between €2 billion and €3 billion have held talks with banks aimed at circumventing the State’s “bad bank” plan and retaining ownership of their performing assets.
The group, which was represented by a prominent accountant in meetings with a number of banks, has lobbied the banks to write down loans before the Government moves to buy up to €90 billion in impaired development loans and related property assets through the new National Asset Management Agency (Nama).
The investors hope that, by writing down the value of the assets to a level similar to the discounts expected under the Nama plan, they will be able to secure refinancing, possibly from foreign banks, and retain good assets.
The investors are opposed to the transfer of performing assets on which loans are being repaid.
The Government and the National Treasury Management Agency (NTMA), under whose aegis the new agency is being created, has said the State will buy development loans totalling €60 billion and a further €20 billion to €30 billion associated properties which are cross-collateralised as security for the development loans.
Bad loans will be recovered from the sale of performing assets.
The accountant, who asked not to be identified, said the group was concerned that the Government would take over commercial properties such as shopping centres, on which loans were being repaid, because they were offered as security for, in some cases, smaller property development loans.
He added that some of the group had sought legal advice but could not progress any action until legislation establishing Nama is published during the summer.
Some in the group are considering the appointment of examiners to protect assets, fearing downgrades of credit ratings on their non-property businesses should they be forced into Nama.
“They don’t understand why you have to put the assets into Nama when Nama is likely to leave the loans with the banks and manage them like a credit committee,” the accountant said.
He said that non-guaranteed banks were in large lending syndicates with banks falling under the Nama plan and that the borrowers may be able to secure refinancing.
