The First Minister's 'confidential memorandum'

This is the 'confidential memorandum' sent from the First Minister's office to Nama. It appears ot be a memorandum of understanding between Stormont and Pimco:

Confidential Memorandum

ANY further third party ("third party") should be prepared to enter into a legally binding memorandum of understanding with the Northern Irish Government (an 'MoU') confirming certain fundamental conditions to how such a third party would deal with and manage the debt portfolio.

These conditions would be:

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1. Firstly, upon acquisition of the debt portfolio, that the third party would release all corporate guarantees and security (an any other similar "secondary security") of borrowers and any related parties (such as ultimate shareholders, group companies) for nil payment. Only the assets which are the primary and principal subject of the underlying debt should be retained as security;

2. Secondly, that any third party's fund structure would satisfy the following requirements:

(a) that it has sufficient existing cash reserves to ensure that the acquisition was funded fully from such existing cash reserves (i.e. any offer is not "subject to funding");

(b) that it's fund is structured in such a way that it is of a long term nature and that it would have sufficient further cash reserves to apply a longer term "hold and investment" strategy by utilising the long term rental streams of the assets and/or increasing value of the assets (as opposed to short term disposals or which would have a significant detriment effect on the Northern Irish market); and

Meanings as to these terms would require further discussion in due course.

3. Thirdly (and in connection with 2 above), the third party must commit to investing further significant funds (and show it has the ability to do so) for the development/improvement of the current underlying assets within the debt portfolio short to mid-term where viable.

4. Fourthly, the existing Northern Irish borrowers will be allowed to continue with the day to day management of the assets. Such borrowers would then be remunerated and incentivised on a proper commercial basis by way of management fees and profit shares/equity participation (following restructuring of the existing debt structures and levels). In the same vein borrowers should also be afforded the ability to be able to "re-purchase" some or all of their portfolios in the longer term subject to attaining proper market value levels.

5. Fifthly, the third party should commit in the MoU to utilise Northern Irish supply chains (construction, professional services and non-professional services for example) at all times on a preferred basis in respect any underlying assets within the debt portfolio whether situated in Northern Ireland, Great Britain or further afield.

6. Sixthly, the third party should be prepared to commit to having a permanent management base in Northern Ireland (populated with experienced professionals with track records of working in Northern Ireland) through which the management, administration and dealings with borrowers within the debt portfolio, will be undertaken. The expectation would be that a significant management presence is situated in Northern Ireland physically and not just be a "brass plate" exercise.