Agenda. Nama Enforcement Review. NAMA Issue for Borrowers & Advisors around Nama. EDUCATING SUPPORTING REPRESENTING

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1 NAMA Issue for Borrowers & Advisors around Nama Nama Enforcement Review Declan McDonald EDUCATING SUPPORTING REPRESENTING Agenda - NAMA Panel for Insolvency and Enforcement Services - Enforcement Options available to NAMA - Review of Statutory Receiver - Practical Considerations for Insolvency Practitioners - Examinership as an option for NAMA - Wrap Up

2 NAMA Panel for Enforcement and Insolvency Services -RFP issued on 28 th June Appointment of panel for insolvency services and property management services - Panel size envisaged to be 24 in total, no indication of the split Enforcement and Insolvency services defined as - act as statutory receiver - act as receiver or liquidator appointed by NAMA - represent NAMA as a creditor in any insolvency process - to provide any other insolvency related service Slide 3 NAMA Panel for Enforcement and Insolvency Services -Property Management services defined as -Providing property management services during an insolvency or receivership process -On occasion to act as a statutory receiver or agent of a statutory receiver -Property agents acting as receivers not common here but in straight property sales scenario will become more common as in the UK Slide 4

3 NAMA Panel for Enforcement and Insolvency Services -Required tender information -Services execution methodology 30% weighting -Key risks 20% weighting -Fee proposal 50% weighting Tender closing date was 19 th July 2010 Successful applicants advised 15 TH September with commencement date of 1 st October Confirmation of PI ( 10m) and Professional Services Agreement Full panel not yet published Slide 5 NAMA Panel for Enforcement and Insolvency Services - Panellists will be required to tender for individual assignments - Tender requests specific to each borrower depending on requirements -Workout advice -Protect security -Enforce security Value for Money consideration competitive and public procurement process will drive costs down, fair deal for the taxpayer Slide 6

4 NAMA Enforcement Options -NAMA controls relationship with the borrower and makes all decisions -Top 100 ( 50bn) intensively managed by NAMA key credit decisions and relationship management. Loan admin carried out by PI -Remainder ( 30bn) Delegated authority NAMA liaison and oversight role with relationship management and loan admin carried out by PI -Increased limits for BOI and AIB now mean 650 less borrowers transferring valued at 6.6bn Slide 7 NAMA Enforcement Options Slide 8

5 NAMA Enforcement Options -Same remedies available to NAMA as to any creditor -Loan Security Documentation Contractual Power -Receiver -Receiver & Manager -Companies Acts -Liquidator -Provisional or Compulsory Liquidator -Examiner Slide 9 NAMA Enforcement Options NAMA Act Part 9 Powers in relation to Assets - General powers in relation to assets (Chapter 2) - Statutory Receiver (Chapter 3) - Vesting Orders (Chapter 4) - Compulsory Acquisition of Land (Chapter 5) - Powers in relation to Land (Chapter 6) - Powers in relation to Development Land (Chapter 7) Slide 10

6 Statutory Receiver Review Statutory Receiver not unique to the NAMA Act - Creature of statute been around a long time - Conveyancing Act 1634/1881 as repealed by Land and Conveyancing Law Reform Act S108 mortgagee may appoint such person as thinks fit to receive the income of the mortgaged property -S99 mortgagee in possession (after appointing receiver) take steps within reasonable time to sell or lease the property Slide 11 Statutory Receiver Review Statutory Receiver given wide ranging powers under NAMA Act - Not subject to any restrictions in the Conveyancing Acts - Power of sale without court order - Not agent of mortgagor, agent of chargor - Cannot be displaced by examiner or liquidator - Not obliged to sell - Schedule 1 to the Act sets out detailed powers Slide 12

7 Practical Considerations for IPs and NAMA Panellists will be required to tender for individual assignments May be Fixed Fee request Tender requests based on consensual workout first and enforcement options to follow if required Need to gather as much information as possible - Heavy weighting on experience Slide 13 Practical Considerations for IPs and NAMA -When tendering consideration needs to be given to all aspects of the case - Strategy for the assignment quote for workout piece separate to enforcement piece? - Business Plan submitted - Jurisdiction of the assets and COMI implications - Securing overseas assets - Co-operation of the borrower - Quality and extent of security - Asset strategy Hold, Complete, Disposal Slide 14

8 Practical Considerations for IPs and NAMA -Key considerations identified by Chairman -Undeveloped/partially complete reduce exposure where appropriate by public auction -Unfinished estates case by case solution -Asset disposal orderly & phased no speculative hoarding -New money where commercial and enhances NAMAs financial position -Improve security position where possible Slide 15 Key Considerations for Overall Strategy Asset Management Ownership Lending & Security Stakeholder Management NAMA Senior secured creditors Junior secured creditors JV partners & other investors 3 rd party unsecured creditors Equity Tax authorities Tax Management Ongoing Funding Creditor Overhang Slide 16

9 Examinership as an option for NAMA In Conclusion -Numerous enforcement options open to NAMA -Preference for consensual workout agreement with the borrower workout vehicle not a liquidation vehicle (Frank Daly) Thank You Declan McDonald PricewaterhouseCoopers. All rights reserved. PricewaterhouseCoopers refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.