The National Asset Management Agency (NAMA), set up by the Irish government in late 2009 to relieve Irish banks of bad property development loans, said it has completed the transfer of the second tranche of loans from Allied Irish Banks, Bank of Ireland, Irish Nationwide Building Society and EBS.

The agency has acquired loans with a nominal value of EUR 5.2 bn in exchange for bonds with a value of EUR 2.7 bn. This represents a weighted average discount of 48% for the four institutions on this tranche. NAMA said loans will be acquired from Anglo Irish Bank over the coming weeks after all the necessary due diligence material has been received and evaluated.

NAMA essenetially functions as a bad bank, acquiring property development loans from the five Irish banks in return for government bonds, primarily with a view to improving the availability of credit in the Irish economy. To date, some EUR 20.5 bn of loans have been acquired at a consideration of EUR 10.4 bn. In total, NAMA plans to take over some EUR 81 bn in loans from the banks.