Five leading Irish property developers have told the European Commission that Nama has been willing to write off millions of euro in loans for certain debtors and has also charged little or no interest on borrowings related to some of its connections.

In an update supplied to the commission in July in their State aid complaint against Nama, the developers are believed to have given specific examples of cases where the agency has given back up to 35 per cent of principal repayments if borrowers meet certain conditions.

In the case cited, it is claimed that Nama signed a connection management agreement with a debtor who owed €440 million.

The agency broke the loan into two tranches – one of €300 million that it expected to be repaid in full with interest, and the balance, which was interest free.

Once the first tranche of €300 million had been repaid in full with interest, some 25 per cent of the next €30 million of the principal would be returned by Nama to the debtor.

It is understood that the developers argue that this effectively amounts to €7.5 million being written off the debt.

Thereafter, up to 35 per cent of any further principal repayments would be returned to the debtor.

The developers are believed to have also supplied details involving one of the complainants who had their loan split into two tranches, one bearing interest (about a quarter of the sum involved) and the other being interest free (around three quarters of the loan).

Sweetheart arrangements

The blended interest rate charged by Nama was between 0.6 and 0.8 per cent of the loans, they have told the commission.

The developers argue that such sweetheart arrangements were not available to them from banks and this put them at a significant financial disadvantage in terms of competing with Nama debtors on developing and selling properties.

They claim that Nama debtors enjoyed an economic advantage as a result of access to funding, and site values at lower rates that available to private developers.

And they argue that Nama is disproportionately active in Dublin and Cork, the main population centres.

The claims are made on behalf of Patrick Crean, David Daly, Paddy McKillen, Michael O'Flynn and MKN Properties.

They argue that Nama’s plan to build 20,000 residential homes – about 15 per cent of the number of units required to satisfy projected market demand – out to 2020 amounts to State aid and distorts the market as the agency’s debtors will have access to cheaper funding.

In a submission compiled by Oxford-based consultants Oxera, the developers argue that Nama has estimated the market price of sites in Dublin and Cork at just €20,000.

Planning permission

Their own analysis, based on data from Lisney, show that site prices for residential units in Dublin, with planning permission, range from €130,000 to €200,000 in Dublin, and between €37,000 and €104,000 in Cork.

The developers have asked the commission to issue a suspension injunction, which would prevent Nama from proceeding with its building programme until the Brussels investigation was completed.

Their original case was submitted in December 2015. It is understood that the State is unwilling to have its responses to the complaint made available to the developers.

A spokesman for the competition unit within the commission declined to comment on the specifics of the case but confirmed that the complaint had been received and that the matter was being looked into.

A Nama spokesman said the agency, along with the Department of Finance, would "continue to engage" with the commission on this issue.

It is understood that Nama will dispute the data provided by the developers.