The Irish state will pay ?54bn to take over bank debt worth ?77bn to cleanse the sector??s toxic assets and encourage renewed lending to businesses, according to Brian Lenihan, the finance minister.
Under the plan the National Asset Management Agency (Nama) will issue the banks with bonds and subordinated debt to the value of ?54bn to take over distressed bank loans.
Mr Lenihan said the market value of these loans was about ?47bn, representing a 50 per cent fall in property prices since the peak in 2007. Nama was paying an average 30 per cent discount to the original value of the loans on the banks?? books, and ??strikes a balance between reflecting the long-term potential of these assets while minimising any potential risk that Nama will make a loss?.
