National Asset Management Agency Act 2009

79.

Regulations in relation to determination of values.

79.— (1) The Minister may make regulations relating to the determination by NAMA of the long-term economic value, or the market value, of a bank asset or a class of bank asset or a property or a class of property, including the matters that NAMA shall or may derive, use, apply or take into account for those purposes.

(2) In making regulations for the purposes of subsection (1) , the Minister shall have regard to the laws of the European Communities governing State aid and any relevant guidance issued by the Commission of the European Communities, and may have regard, and may include such provisions relating, to such of the following as he or she thinks appropriate:

( a) with reference to the long-term economic value of property—

(i) the extent to which the price or yield of such property has deviated from the long-term historical average,

(ii) supply and demand projections by reference to the type of asset and its location,

(iii) macroeconomic projections for growth in the gross domestic product and for inflation or deflation,

(iv) demographic projections,

(v) land and planning considerations (including national, regional or local authority development or spatial plans) that may exert an influence on the future value of the asset concerned,

(vi) analyses presented by the Minister for the Environment, Heritage and Local Government on the extent to which existing land zoning and planning permissions granted and in force meet or exceed projected growth requirements,

(vii) analyses presented by the Dublin Transportation Office or any national transport authority of existing and future transport planning and the associated supply and demand projections for land use,

(viii) any analysis by the Minister for Communications, Energy and Natural Resources in relation to the potential rise in energy and other costs due to the long-term decline in non-renewable resources,

(ix) the specification, for the purposes of the determination of the long-term economic value of particular parcels of land, of a fraction by which the long-term economic value determined by NAMA shall not exceed the market value of each such parcel,

(x) the specification, for the purposes of the determination of the long-term economic value of all land held as security in acquired portfolios, of a fraction, by which the long-term economic value of that land shall not exceed its total market value;

( b) with reference to the long-term economic value of bank assets—

(i) the long-term economic value of property,

(ii) the net present value of the anticipated income stream associated with bank assets of that kind,

(iii) in the case of rental property, current and projected vacancy rates,

(iv) loan margins,

(v) an appropriate discount rate to reflect NAMA’s cost of funds plus a margin that represents an adequate remuneration to the State that takes account of the risk in relation to the bank assets acquired by NAMA,

(vi) the mark-to-market value of any derivative contracts associated with bank assets of that kind,

(vii) any ancillary security such as personal guarantees and corporate assets, and

(viii) fees reflecting the costs of loan operation, maintenance and enforcement;

( c) such other matters that he or she considers relevant to the long-term economic value or market value of property or bank assets including—

(i) matters to be derived, used, applied, taken into account or not taken into account;

(ii) the values to be attributed to any matters or the adjustments to be made in or by virtue of their application;

(iii) the data, criteria, information, rules and methodology that may be used or applied in determining the value or application of any matters or in deriving any matters to be used or applied;

(iv) the use of the net present value methodology in determining the value of any property or bank asset;

(v) the appropriate discount rate to reflect NAMA’s cost of funds plus a margin that represents an adequate remuneration to the State that takes account of the risk in relation to the acquired bank assets to be applied in determining the net present value of a cash flow;

(vi) the specification, for the purposes of attribution and application across all bank assets, or all bank assets of a particular class, of a standard discount rate, to be attributed to or applied in the calculation of each bank asset, or each bank asset of the particular class, as the case may be, acquired by NAMA, which in the opinion of the Minister is necessary or appropriate to provide for enforcement costs, due diligence costs and other relevant costs incurred or likely to be incurred by NAMA over its lifetime in the discharge of its functions;

(vii) the extension of the maturity date of any bank asset for such period as NAMA considers appropriate after its actual maturity to allow a reasonable period for its management and enforcement;

(viii) the types or classes of property in respect of which the market value shall be deemed to be the long-term economic value.

(3) Every regulation made under subsection (1) shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the regulation is passed by either such House within the next 21 days on which that House has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done under the regulation.

Annotations:

Editorial Notes:

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Power pursuant to section exercised:

• (22.10.2010) by National Asset Management Agency (Determination of Long-Term Economic Value of Property and Bank Assets) (Amendment) Regulations 2010 (S.I. No. 504 of 2010).

• (3.02.2010) by National Asset Management Agency (Determination of Long-Term Economic Value of Property and Bank Assets) Regulations 2010 (S.I. No. 88 of 2010), as amended (1.10.2010) by Central Bank Reform Act 2010 (23/2010), s. 16(11) and sch. 3 part 8 par. 43, S.I. No. 469 of 2010 and (22.10.2010) by National Asset Management Agency (Determination of Long-Term Economic Value of Property and Bank Assets) (Amendment) Regulations 2010 (S.I. No. 504 of 2010).

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Previous affecting provision: power pursuant to section exercised (21.12.2009) by National Asset Management Agency (Determination of Long-Term Economic Value of Property and Bank Assets) Regulations 2009 (S.I. No. 546 of 2009); revoked (3.03.2010) by National Asset Management Agency (Determination of Long-Term Economic Value of Property and Bank Assets) Regulations 2010 (S.I. No. 88 of 2010), reg. 10.