It came as a surprise to many that in May 2010, NAMA needed a €250m “working capital advance” repayable in October 2010. A surprise because NAMA already had €100m of capital (€51m from the “independent” private sector and €49m from the State) and also NAMA had taken over €16bn of loans and at least a third were supposed to be performing. Anyway, a €250m advance was provided by the Minister for Finance and was revealed in the Dail a day before it was disclosed in the May 2010 Exchequer statement. Today NAMA has less than a week to repay the €250m. This entry examines the likelihood of that happening, the probability of another bail-out (or “working capital buffer advance” in the language of Upper Merrion Street). The entry again asks about NAMA’s quarterly report and accounts which was due by the end of September 2010 (relating to the second quarter to 30th June 2010) – why is there a delay and is the delay due to the consideration of any excision from the report?
I believe NAMA is facing a liquidity crisis – remember that term from the banking crisis? It’s supposed to refer to a situation where NAMA is due cash (either in interest or capital or from its euro paper programme) but can’t actually lay its hands on the readies, and meanwhile there are developers pleading for working capital and indeed salaries around the €200k per annum mark if you believe some of yesterday’s newspaper reporting. The reasons I believe NAMA is facing a liquidity crisis are as follows: