UPDATE 1-Ireland's 'bad bank' may swell on leftover Anglo loans

Thu Feb 21, 2013 11:17am EST

Related Topics

* NAMA to take over residual 13 bln eur Anglo portfolio

* Chairman sees most debtors refinancing before facing NAMA

* Says significant interest in 1.1 bln eur Irish loan sale

By Padraic Halpin

DUBLIN, Feb 21 (Reuters) - Ireland's "bad bank" could see its balance sheet swell by close to 50 percent as it assumes the assets of the liquidated former Anglo Irish Bank.

Ireland's government rushed through emergency legislation earlier this month to liquidate the failed Anglo Irish Bank as part of a deal struck with the European Central Bank to ease the country's debt burden.

The National Asset Management Agency (NAMA), the state's so-called "bad bank", will acquire any unsold parts of Anglo's 13 billion euro ($17 billion) loan portfolio once the liquidator completes a valuation and sales process in late August.

"This new portfolio will significantly increase NAMA's workload," NAMA chairman Frank Daly said in a speech on Thursday.

"Potentially, depending on the scale of loan transfers, the size of our balance sheet could increase by close to 50 percent."

"I think from a commercial point of view most of those individuals or companies would certainly not want to come to NAMA. I think the more of them that can refinance themselves in the intervening period with the liquidator, the better."

"Some of them are already making efforts in that direction. Either way it's a kind of backhanded compliment to NAMA that they don't want to come near us," Daly added in an interview with national broadcaster RTE.

NAMA, created in 2009 to purge Irish banks of some 74 billion euros of risky property-related loans, has generated 11 billion euros from asset disposals and other income, including 300 million euros a month in rent collections.

Daly said it was closing in on another 2 billion euros in sales and that although it is currently overseeing sales of 1.5 billion euros of Irish property and 1.1 billion euros of Irish loans, it would not engage in a quick sale of many domestic assets.

He said there was significant interest in the two loan portfolios - dubbed 'Project Club' and 'Project Aspen' - with the latter one of NAMA's "first big ones" that would provide a signal for future sales.

A source with knowledge of the process told Reuters that bids are expected to come in at 250 to 300 million euros for the whole 'Project Aspen' book based on a par value of 810 million.

"It's now genuine investor interest," Daly said of who was now trailing NAMA assets.

"We had an awful lot of tyre kickers in the early days, offering us derisory cents in the euro and that got even worse when Ireland got into the bailout," he said, referring to the country's 85 billion euro ($113 billion) bailout in late 2010.

"That has changed. There is a growing level of interest and a growing level of reality that we are not fire saling and we have got away some good deals in recent months. It's not just from the States, not just from the UK. It's quite widespread."

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