The National Asset Management Agency Bill 2009 was published on 10 September 2009. Many of the changes proposed in the Bill provide greater clarity around the functions and powers of NAMA but do not materially alter the fundamental principles of NAMA as outlined in the draft proposal. More detailed information surrounding disclosure requirements on participating institutions has also been included. New measures include:

  • Subordinated Debt Securities

The introduction of "subordinated debt securities" for the purpose of acquisition of bank assets. The legislation provides that where the terms and conditions of the subordinated debt are referenced to or based on a measure of financial performance, the measure will be the financial performance of NAMA in its totality and not any part or parts of the acquired portfolio. This potentially exposes a participating institution to a greater loss on the value of the assets transferred by it to NAMA and effectively creates a "loss-sharing" between all of the participants in NAMA.

  • 80% Windfall tax rate

While the Bill does not contain the provision implementing the windfall capital gains tax arising as a result of rezoning decisions announced earlier in the week, the Minister said in his statement on publication of the Bill that an amendment would be brought in at Committee Stage "to ensure that windfall gains on rezoned land would be subject to capital gains tax at the rate of 80%".

Other changes include a limit on the borrowing powers of NAMA of €5,000,000,000 for purposes other than funding the consideration to be paid by NAMA for the acquisition of bank assets, a clear emphasis on the exclusion of NAMA from any liability in respect of alleged representations, consents etc, a new offence of lobbying and more detailed information in relation to the compulsory acquisition by NAMA of land.

Details in relation to the valuation methodology to be applied in the acquisition of assets are due to be released tomorrow, 16 September 2009.