Anglo Irish Bank is facing a haircut of nearly 60 per cent in its tranche two loans, according to Nama and valuation sources, raising concerns it will need further capital injections from the government.
The source in Nama said the discount would be in the high 50 per cents, but valuation sources said they were seeing declines of between 50 per cent and 60 per cent in some cases, with land values coming in even lower.
Anglo would not comment on the haircut, but the bank is expected to be ready to transfer the loans by the middle of next month.
Anglo accounts for about €8bn of the €13bn due to be transferred to the asset management agency in this tranche, so a discount of the extent envisaged would significantly increase the average haircut being applied to the financial institutions.
Nama announced last week that it had acquired loans with a nominal value of €5.2bn as part of tranche two. Nama securities with a value of €2.7bn have been issued to the four institutions.
This represents a weighted average discount of 48% for the four institutions on this tranche, including a 72% haircut on loans given by Irish Nationwide.
The transfer of Anglo's loans has been delayed by the complexity of the structures used by the bank when they were issuing the loans and the initial delay in transferring loans belonging to tranche one.
Meanwhile, Anglo applied last week for planning permission to open a restaurant in a property it owns on Mary Street close to the Jervis Street shopping centre in Dublin.
The Jervis centre is part-owned by Paddy McKillen who is resisting transfer of his loans to Nama.
Regeneration Developments, the company planning a shopping centre in Limerick in which Anglo has a 50% stake following an ill-timed buy-in by the bank, secured a new mortgage facility in recent weeks, filings with the Companies Office show.