Brendan McDonagh: Nama chief

About 14 developers have already agreed debt forgiveness packages with Nama. The Sunday Tribune revealed last week that Nama will allow some developers to walk away from part of their debt if they have achieved a certain price for their assets, unwound transfers and co-operated with the institution during the work-out process.

However, a Nama spokesman stressed that additional borrowings advanced to a developer during the process – such as money used to complete a development – will also have to be repaid in full before debt forgiveness can be considered. Failure by a developer to do so will result in bankruptcy.

The final €16bn tranche of loans that are being transferred to Nama will be AIB and BoI development-related loans that were below €20m. The minister for finance will decide the final haircut on these loans and one of the options Nama is considering is categorising the loans into nine separate slices. These would be by region – Ireland, the North and Britain – and by type – land, less than 30% developed and more than 30% developed. Nama is considering breaking the performance of these loans out separately in its reports.

Meanwhile, Nama chief executive Brendan McDonagh said last week that it hoped to complete the sale of three portfolios of Irish properties before the end of the quarter. Two of the purchasers are overseas and one is domestic with property sources claiming that the potential buyer is Green Property.

It was revealed last week that the banks had tried to transfer €1bn of loans given to developers as working capital in the build-up to Nama at a 100% value, citing an agreement with the Central Bank. However the Sunday Traibune has learned that Nama baulked at taking on half of those loans because it was not satisfied that the paperwork was in order or that the loans were commercially justified. "Not all of the loans were deemed to be," a Nama spokesman said.

McDonagh, answering a question from Labour's Pat Rabitte, also confirmed Sunday Tribune reports that banks were lending more than 100% of the cost of a scheme to developers during the bubble.