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34 2009

National Asset Management Agency Act 2009

Chapter 2

Designation of Eligible Bank Assets

Eligible bank assets.

69 .— (1) The Minister may, after consultation with NAMA, the Governor and the Regulatory Authority, and considering the purposes of NAMA and the resources available to the Minister, prescribe, by regulation, classes of bank asset as classes of eligible bank asset.

(2) The classes of bank assets prescribed under subsection (1) may include—

(a) credit facilities issued, created or otherwise provided by a participating institution—

(i) for the purpose, whether direct or indirect and whether in whole or in part, of purchasing, exploiting or developing development land,

(ii) where the security connected with the credit facility is or includes development land,

(iii) where the security connected with the credit facility is or includes an interest in a company engaged in purchasing, exploiting or developing development land,

(iv) where the credit facility is directly or indirectly guaranteed by a company referred to in subparagraph (iii),

(v) directly or indirectly to a debtor who has provided security referred to in subparagraph (ii) or (iii), or

(vi) directly or indirectly to a person who is an associated debtor of a debtor to whom a credit facility described in any of subparagraphs (i) to (iii) has been provided,

(b) credit facilities and classes of credit facilities (other than credit facilities referred to in paragraph (a)) relating to debtors or associated debtors of participating institutions (or classes of debtors or associated debtors of participating institutions) where the total amount of indebtedness in respect of such facilities is such that, in the opinion of the Minister, acquisition by NAMA is necessary for the purposes of this Act,

(c) other rights arising directly or indirectly in connection with a credit facility described in paragraph (a) or (b) including—

(i) a contract to which the participating institution is a party or in which it has an interest,

(ii) a benefit to which the participating institution is entitled, and

(iii) any other asset in which the participating institution has an interest,

(d) bank assets associated with bank assets specified in paragraphs (a) and (b), and

(e) any other class of bank asset of a participating institution the acquisition of which the Minister is of opinion, after consultation with the Commission of the European Communities, is necessary for the purposes of this Act.

(3) In forming an opinion for the purpose of subsection (2) (b), the Minister may take into account—

(a) the total number of credit facilities or classes of credit facilities provided by the participating institution to those debtors and associated debtors or classes of debtors and associated debtors, and

(b) the aggregate indebtedness of debtors and associated debtors or classes of debtors or associated debtors referred to in subsection (2) (b) owed to any other participating institution.

(4) A bank asset that is in a class prescribed under subsection (1) is referred to in this Act as an “ eligible bank asset ”.

(5) A class of bank asset prescribed under subsection (1) shall be taken not to include a credit facility that entered a participating institution’s balance sheet after 31 December 2008. For the avoidance of doubt, where a credit facility entered a participating institution’s balance sheet on or before 31 December 2008, but security was taken for the credit facility after that date, and the credit facility is otherwise an eligible bank asset, the credit facility is an eligible bank asset.

(6) Notwithstanding subsection (5), a bank asset in a prescribed class is an eligible bank asset if, in the opinion of NAMA, the related credit facility entered a participating institution’s balance sheet on or before that date even if renegotiated or refinanced after that date. For the purposes of determining whether a credit facility entered a participating institution’s balance sheet on or before 31 December 2008, NAMA may take into account the terms of any renegotiation, restructuring or refinancing of a credit facility effected after 31 December 2008.

Meaning of “associated debtor” in this Act.

70 .— (1) For the purposes of this Act, a person is an “ associated debtor ” of a debtor if the person—

(a) is or was at any time directly or indirectly indebted or otherwise obligated to a participating institution under or in connection with a credit facility, and

(b) is or was at any time—

(i) a body corporate that was a subsidiary of, or a related company (within the meaning given by section 140(5) of the Companies Act 1990 ) to, the debtor,

(ii) a nominee of the debtor, including a person who may or does in fact act at the express or implied direction or instruction of the debtor or another associated debtor of the debtor,

(iii) acting in the capacity of trustee of a declared or undeclared trust the beneficiaries of which include (directly or indirectly)—

(I) the debtor,

(II) a person referred to in subparagraph (ii), or

(III) a body corporate controlled by the debtor or a person referred to in that subparagraph,

(iv) in partnership, within the meaning of the laws of any relevant place, with the debtor, in relation to a bank asset which at the time of the partnership was, or subsequently became, of a class of bank assets prescribed under section 69 (1),

(v) a body corporate of which the debtor is the sole member, or

(vi) a body corporate controlled by the debtor,

or

(c) a member of any other class of person prescribed by the Minister for the purposes of this subsection.

(2) For the purposes of subsection (1)(b)(vi), a body corporate shall be taken to be controlled by a debtor if the debtor is (whether alone or together with any one or more of the persons mentioned in subparagraphs (i) to (v) of subsection (1)(b), and whether directly or indirectly)—

(a) interested in one-quarter or more of the equity share capital of the body, or

(b) entitled to exercise or control the exercise of one-quarter or more of the voting powers at any general meeting of the body.

(3) In subsection (2)

(a) “ equity share capital ” has the same meaning as it has in section 155 of the Companies Act 1963 , and

(b) the reference to voting power exercised by a debtor includes voting power exercised by a nominee of the debtor or another body corporate which that debtor controls.

(4) Section 54 of the Companies Act 1990 applies for the purpose of determining, for the purposes of subsection (2), whether a person holds an interest in shares.

Dealings by participating institutions with eligible bank assets.

71 .— (1) A participating institution shall, until it has been served with a completion notice or NAMA directs otherwise—

(a) administer, service and deal with all of its eligible bank assets in the same manner as, and with the same level of professional skill, care and diligence as, a prudent lender acting reasonably would so administer, service and deal, and

(b) so act in relation to those bank assets in good faith having regard to the purposes of this Act.

(2) A participating institution shall not without the prior written approval of NAMA—

(a) deal with any of its eligible bank assets otherwise than in the ordinary course of its business,

(b) deal with any of its eligible bank assets in such a way as to prejudice or impair NAMA’s prospective interests or priorities in relation to such a bank asset,

(c) compromise any claim or release, vary, relinquish or otherwise take or omit to take any action if its doing so could reduce, lessen or impair any security, right, obligation, ranking or priority held or enjoyed, directly or indirectly, in connection with such a bank asset, or

(d) amend or vary any contract relating to such a bank asset unless contractually obliged to do so.

(3) NAMA may issue guidelines or policy statements in relation to the kinds of transactions that it is likely to be prepared to approve under subsection (2).