A move by the Irish government in March to buy Irish Life Assurance for 1.3 billion euros ($1.7 billion) could jeopardize its attempt to keep 30 billion euros in debt off its balance sheet, after the deal changed the status of a special-purpose vehicle that owns the debt.
Reuters reported Thursday that the holding company National Asset Management Agency Investment (NAMC) was created to eliminate 74 billion euros in risky loans for land and development. The holding company does much of its business via a special-purpose vehicle that, for EU accounting purposes, permits the Irish government to keep NAMC’s debt off its own balance sheet.
However, that special status was placed in jeopardy after the Irish government made a move to buy Irish Life, which is one of the three private-company owners of 51% of NAMC. With the purchase, the ownership structure is changed, potentially putting the special-purpose vehicle into majority government control.