THE NATIONAL Asset Management Agency has repaid a further €500 million of the €30.5 billion borrowed through the issuing of State-backed bonds to buy toxic property loans from the banks.

This brings the agency’s repayments on the sum borrowed by the agency to €1.25 billion. Nama repaid €250 million in March and €500 million in May.

The repayments are in addition to €299 million in advances made by the Minister for Finance that were repaid in October 2010 and February 2011, bringing the reduction in the agency’s total indebtedness to €1.55 billion in 18 months.

“Further bond repayments are likely before the end of the year and our ability to make these repayments reflect the agency’s very strong cash flow position,” said Nama chairman Frank Daly.

Nama has generated €4 billion from property sales and loan refinancings, though this has been shared with non-Nama banks that provided loans jointly with the five participating lenders.

A Nama spokesman declined to say how much of the €4 billion the agency has received in the approved sales and refinancings.

Allied Irish Banks, which is 99.8 per cent owned by the State, is the biggest beneficiary of the repayments as the bank holds the most Nama bonds, having acquired the bonds issued by the agency to Anglo Irish Bank along with Anglo’s deposits in February.

The bank, including subsidiary EBS, will receive about €360 million of the latest repayment. Bank of Ireland will receive €90 million, while Irish Life and Permanent will receive €50 million as it acquired the Nama bonds held by Irish Nationwide Building Society in February. Irish Life and Permanent didn’t sell any loans to Nama, as it avoided development lending.

Nama’s repayments to the banks will be used to reduce their heavy borrowings from the European Central Bank, a condition of the EU-IMF bailout of the country.

Irish banks had borrowed €98 billion from the ECB at the end of August and €56 billion from the Irish Central Bank. The Nama bonds were used as collateral to draw cash from the ECB.

Nama issued €30.5 billion in bonds to purchase loans with a face value of €72.3 billion from five financial institutions, representing a discount of 58 per cent. Some 5 per cent of the debt issued by Nama was subordinated bonds which will only be repaid if it makes a profit after 10 years.