DBRS Confirms LT Gteed Debt of National Asset Management Limited at A (low); Trend Revised to Stable

DBRS Ratings Limited (DBRS) has today confirmed the A (low) Guaranteed Senior Unsecured Debt rating of the National Asset Management Limited (NAML or the Group). The trend on the Long-Term rating has been revised to Stable from Negative. The R-1 (low) Short-Term Guaranteed Senior Unsecured Debt rating is confirmed with its Stable trend. This rating action follows DBRS’s confirmation of the A (low) rating of the Republic of Ireland and the trend change to Stable from Negative on March 28, 2014.

National Asset Management Limited is a special purpose vehicle set up by Ireland’s National Asset Management Agency (NAMA) and is responsible for issuing government guaranteed debt instruments for the purposes of acquiring eligible bank assets. National Asset Management Limited is a wholly-owned subsidiary of National Asset Management Agency Investment Limited, which is 51% owned by private investors and 49% owned by NAMA. For the nine month period to end-September 2013, NAMA reported a net profit after tax of EUR 275.2 million despite absorbing an impairment charge of EUR 385 million.

Following the redemption of EUR 3 billion of senior notes in March 2014 NAMA has now redeemed in total EUR 10.5 billion of notes, or around 35% of the debt originally issued to acquire the bank assets. NAMA has indicated that it expects to repay a further similar amount later in 2014 which would leave it well on course to exceed its 2014-2016 EUR 7.5 billion redemption target. DBRS also notes that in 2014 NAMA has, for the first time, paid a coupon on the EUR 1.6 billion of subordinated debt that was issued to acquire the assets.

As a result of the guarantee the ratings will move in line with the rating of the Republic of Ireland.

Notes:
All figures are in Euros (EUR) unless otherwise noted.

The principal methodology applicable is: the Global Methodology for Rating Banks and Banking Organizations. Other methodologies used include the DBRS Criteria: Support Assessment for Banks and Banking Organisations. The rating methodologies and criteria used in the analysis of this transaction can be found at: http://www.dbrs.com/about/methodologies.

The sources of information used for this rating include company documents and DBRS ratings of the Republic of Ireland. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

DBRS does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance.

Generally, the conditions that lead to the assignment of a Negative or Positive Trend are resolved within a twelve month period. DBRS’s outlooks and ratings are under regular surveillance

For further information on DBRS historic default rates published by the European Securities and Markets Administration (“ESMA”) in a central repository, see:
http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml.

Ratings assigned by DBRS Ratings Limited are subject to EU regulations only.

Lead Analyst: Ross Abercromby
Rating Committee Chair: Elisabeth Rudman
Initial Rating Date: April 21, 2011
Most Recent Rating Update: November 27, 2013

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For additional information on this rating, please refer to the linking document located at: http://www.dbrs.com/research/236983/banks-and-banking-organisations-linking-document.pdf

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