o Bol Meeting 29 July restructuring and UK Schemes. Applicability ofwarehousing Initiatives in Northern Ireland

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1 I Agend Item I - Updte since 13 June Meeting o Bol Meeting 29 July restructuring nd UK Schemes. Applicbility ofwrehousing Inititives in Northern Irelnd Updte from 13 June Meeting Both AIB nd BOI were consulted in reltion to the both the use of SME inititives lunched in the UK. Both bnks hve indicted tht demnd is the primry reson for not prticipting in the schemes. However AIB expect to enter the Funding for Lending schne shortly. In reltion to specific trgets for mortgge rrers nd SME restructuring, these do not pply for the bnks in NI but both bnks hve indicted tht they re working closely with customers in difficulty nd re offering sustinble solutions on regulr bsis. Allied Irish Bnk (Ctherine Rogers - Shreholding Mngement Unit) AIB hs informed us tht discussions regrding entering the Funding for Lending Scheme re well dvnced nd decision is expected from the Prudentil Regultory Authority (PRA) before the end of the yer. Currently Ulster Bnk is the only bnk operting in NI to hve pprovl s it ws pproved s prt ofrbs. In reltion to the UK Govemment's Enterprise Finnce Gurntee (EFG) the bnk hs reported lower thn nticipted customer enquiries/tke up. The scheme hs been promoted through FTB reltionship bnkers nd the decline rte for pplictions under EFG is low. In the mjority ofcses it is due to lck of repyment cpcity or leverge rther thn lck of security hs been the primry reson for the credit ppliction not progressing. Customers hve lso been wry ofthe 2%o chrge nd the level of dministrtion ttched to the scheme. AIB hs lso informed us tht FTB is working closely with customers in difficultly to help them meet their finncil obligtions in n pproprite nd sustinble wy. Bnk of Irelnd (Pul Keogh - Shreholding Mngement Unit) Bnk of lrelnd hs confirmed tht it ctively seeks to promote SME lending in Northem Irelnd. Its recent experirce in this regrd hs been lck ofdemnd rther thn lck of supply. Bnk of Irelnd lso confirmed tht it hs regulr dilogue with the uthorities in Northem lrelnd. Bnk of Irelnd hs confirmed tht it works closely with distressed borrowers to discuss their finncil obligtions nd sustinble solutions in this regrd. 1

2 t Agend Item 5 - IBRC Updte IBRC in Specil Liquidtion nd Northern Irelnd bsed stff. (Clre McCbe - Shreholding Mngement Unit) Generl Communictions with stff nd their representtives remins key focus of the Specil Liquidtors. Since the liquidtion of IBRC commenced on the 7fi Februry, 48 onployees in the UK hve resigned. This represents 28Yo of the UK workforce. In reltion to Northern Irelnd ernployees, there re currently 6 non NAMA employees in the Belfst office. All of these remining employees hve been issued letter stting tht they will not be mde redundnt on or before the 3l" Mrch This is in line with the mjority of nployees in offices in the Republic who were offered new contrcts up until tht dte. Prior to 12 August 2013 when the servicing of the NAMA book trnsferred fiom IBRC in SL to Cpit, there were totl of 23 NAMA unit employees in the Belfst office of IBRC in SL. As t the 27s August, there re 5 of these ernployees rernining with redundncy dte of l1 Septnber 2013, nd further 2 legl stff with redundncy dte of 31 August The mjority of these stff (15) hs tken up employment with Cpit Asset Services who hve tken over the lon service of the NAMA portfolio in IBRC. The trnsfer of the NAMA lon book to Cpit took plce on the l2s August 2013 nd the (15) stff were mde redundnt by IBRC in SL on 9 August It is likely tht the Specil Liquidtors will close the Belfst office in due course s the bnk is wound up. This is in line with ctions being tken in reltion to other regionl offices of the bnk. This is unfortuntely commercil decision for the liquidtors nd we re unble to interfere. Furthermore we re not yet cler of Cpit's intentions to retin bse in the North. Redundncy Pyments. Where stff is mde redundnt, pyments, entitlements nd limittions mde by the UK Redundncy Pyments Office re pplied to Northern Irish employees s they would pply to n ernployee in Englnd nd Wles. o NI ernployees cn mke clim for sttutory redundncyi py-injieu of notice ginst the NI Insolvency Service under the Employment Rights (Northem Irelnd),Order The NI Insolvency Service then hs the right to mke clim (s preferentil clim) in the specil liquidtion under ROI Lw in respect of mounts dvnced to ernployees bsed in Northem Irelnd for Sttutory Redundncy nd Py-inJieu of Notice.. It is not possible for the Minister to interfere in these mtters s it would impct the distribution ofssets in the liquidtion s to do so could open him up to chllenge. 2

3 Agend ltem 5 - NAMA Updte NAMA in Northern Irelnd (Srh Lwless - Shreholding Mngement Unit) NAMA Propertv Portfolio 3% of NAMA's property portfolio is in Northem Irelnd. Of this, l80% is office spce, l7o/o is retil, l0% is residentil, 5% is development lnd nd 3% re hotel nd leisure fcilities. The blnce of the NAMA portfolio contins lnd (25%) nd other investment ssets (22oh). 70% of Northern Irelnd portfolio is completed nd income producing. By the end of 2012, NAMA disposls in Northern [relnd were of the order of 100m. NAMA dopts phsed nd orderly pproch to sles in Northern Irelnd. Properties re relesed for sle in line with the bsorption cpcity of the Northem Irelnd mrket - NAMA does not hord or fire sell properties. NAMA hs provided working nd development cpitl to Northem Irelnd debtors of over 160m, providing vitl funding into the locl construction sector. [n smll number of cses NAMA hs hd to enforce ginst debtors in Northern Irelnd. NAMA's pproch to dte, evidenced by its ctions, is tht enforcement ction ginst debtors is dopted only s lst resort fter ll other options hve been exhusted. NAMA hs dopted supportive stnce towrds mjority of its debtors nd is working with bout two thirds of them. NAMA works with debtors on the bsis tht the mjority of thern hve given undertkings, nd tken tngible ctions, to work with NAMA to mximise the mounts tht cn be recovered to repy their debts for the benefit of txpyers. NAMA is prticulrly cognisnt in trding business enforcernent of working with the ppointed Receiver/Administrtor to protect employment to the gretest extent possible (for exmple, the Rmd Hotel, which is subject to enforcement, continues to fully trde). Northern Irelnd Advisorv Committee In ccordnce with the NAMA Act, NAMA hs estblished the Northern Irelnd Advisory Committee to dvise the NAMA Bord in reltion to its strtegy for Northern Irish ssets. The Committee is chired by the NAMA Bord Chirmn, who meets with the Northern Irelnd Minister for Finnce nd Personnel on regulr bsis, including two forml meetings yer to discuss NAMA mtters in the context of its work in Northern Irelnd nd more fiequently s required. The NAMA Chirmn is due to meet with Minister Hmilton in erly October (The Chirmn ws unble to meet Minister Hmilton on this prticulr visit s he is out of the country on pre-rrnged business).

4 t [n2012 & 2013 NAMA supported ctivity orgnised by o the Northern lrelnd Chmber of Commerce o the Ulster Society of Chrtered Accountnts o the Northern Irelnd Assembly nd Business Trust o Bnk of Englnd Agent for Northem Irelnd o Institute of Directors Northem lrelnd o CBI Northem Irelnd o University of Ulster In ddition, NAMA is giving n updte to the Northern Irelnd Chmber of Commerce on 246 October 2013 (we understnd Minister Hmilton hs been invited to this). Positive working reltionship with the Northem Irelnd Executive nd Assembly cross ll the min prties. Specific briefings provided to Northem Irelnd politicl prties. Dedicted contct chnnels for elected representtives: NIR@nm.ie. IBRC It will be towrds the end of the yer before clrity will be brought on the scle of integrtion of IBRC lons into NAMA nd, ccordingly, resource requirernents re yet to be fully determined by NAMA. The Bord of NAMA's pproved plns t present re to recruit number of legl nd crediucse mngement personnel directly into NAMA for the existing NAMA portfolio. Cpit re the service provider replcing IBRC on the existing NAMA portfolio nd hve n office in Belfst. The NAMA CEO hs met with Lrry Broderick of the IBOA nd hs been forthright bout the likely recruitment scenrios. o Redundncy pyments to IBRC stff re mtter for the Specil Liquidtors. o On the 3'd of July 2013 NAMA nnounced tht following competitive tendering process it hd selected two service providers s preferred bidders to mnge lon portfolios tht it my cquire from the Specil Liquidtors. NAMA selected Certus to provide services on the portfolio of commercil property lons, residentil investment nd development lons nd business bnking lons. The Agency lso selected consortium comprised of Pepper Asset Servicing nd Serco to provide services on the portfolio of personl lons, principlly residentil mortgge lons. 4

5 NAMA's work in Northern lrelnd Development Funding As prt of its on-going investment progrmme to enhnce the vlue of its ssets in Northern Irelnd, NAMA is providing funding for number of development projects. To dte, new dvnces by NAMA to Northern Irelnd debtors exceed 160m, exmples of which include: M i I I mount, Dundon ld, B e lfs t NAMA is providing funding of f9m through n greement between the courtppointed dministrtor nd Northem Irelnd hedqurtered construction compny for new 95-unit housing development in Millmount, Dundonld, close to Belfst. The construction phse of the project which is expected to lst pproximtely 18 months is estimted to crete 100 jobs. The first phse of the development will consist of bedroom houses, subject to mrket conditions nd the success of the first phse the site hs outline plnning for 510 residentil properties. Agreed sles exceed f lm. Lnyon Plz/The Soloist Building NAMA is providing fl5m in funding to complete two buildings t Lnyon plz, high profile office nd leisure complex whose existing buildings include the Wterfront Hll conference nd entertinment venue. The buildings being completed by NAMA's funding re: Lnyon Plz, c100,000 sq. ft. office building nd The Soloist Building, c90,000 sq. ft. office building. It is nticipted tht this investment will secure substntil employment during the construction process. Deprtment of Finnce nd Personnel recently nnounced it is to tke 90,000 sq. ft. ofoffices t Lnyon Plz. When fully occupied the two buildings will ccommodte in the region of 1,750 people Vendor Finnce NAMA hs indicted tht it will mke up to 2bn in vendor finnce/medium term lons vilble to prospective purchsers of commercil property minly in lrelnd, but lso in Northern lrelnd 5

6 NAMA hs engged with Invest Nl nd professionl nd representtive bodies to promote the vilbility of vendor finnce NAMA lso engges with Invest NI in reltion to ssets suitble for indigenous nd FDI clients in Northern lrelnd. Joint Ventures NAMA lso engges in Joint Ventures with prtners, who, longside NAMA, cn introduce upfiont equity nd in tum vil of third prty or NAMA debt finncing, thus incresing the potentil for overll investment within the developmnt sector. Millmount scheme is n exmple of Joint Venture pproch in Northern Irelnd. Socil Housing NAMA offers purchse nd long{erm lesing options to locl uthorities nd pproved housing bodies. In Northem Irelnd, trnsctions hve included: sle of site in Newcstle for socil housing to North West Housing Assocition; option to Clnmill Housing Assocition in reltion to the Hilden Mill site, ner Lisburn;. June sle of20 prtments t Throne View, Belfst to Oklee Housing Assocition;. July 2013 sle of 3l prtments t King Street, Belfst to Oklee Housing Assocition Working with the Northem Irelnd Federtion of Housing Associtions nd its members to ssist with the Socil Housing Development Progrmme in Northem Irelnd. Economic Reserch nd Regenertion NAMA is collborting with the University of Ulster on reserch inititive to support better understnding of the supply nd demnd dynmics of lnd cross the region, including housing ffordbility nd brriers to mrket entry NAMA hs estblished reltionships estblished with key stkeholders in economic regenertion including locl Councils nd Deprtment ofthe Environment 6