Developer Paddy Kearney’s property business had the interest payments on its loans slashed during the time that State agency Nama held the debt, its accounts show.

US company Cerberus bought the £300 million-plus owed by Mr Kearney's Kilmona Holdings from Nama as part of last year's controversial Project Eagle deal. The developer this week said the agency had threatened to take control of his business and accused it of damaging Northern Ireland's economy.

Accounts filed by Kilmona Holdings, known until early this year as PBN, show that in 2008, before Nama took over its loans, it paid £18.4 million interest on debts of £314.4 million and the following year, it paid £20.5 million interest on a £317.7 million liability.

Liability

In the 18 months to the end of June 2011, during which time Nama took over its loans, PBN paid £18.25 million interest on £314 debts. In the 12 months to the end of June 2012, it paid £9.6 million on a similar liability.

It paid £7.4 million on a £304 million debt in the 12 months ended June 30th, 2013. The actual rates paid during this time fell from 6 per cent in 2009 to 2 per cent in 2013.

However, the 12 months to the end of June last year, ahead of Nama’s sale of its loans to Cerberus, it paid £40.2 million interest on debts of £334 million. This was a rate of 12 per cent.

British lender, Lloyds, was also a creditor of the group during this time, but much of the debt was due to Nama. PBN was a large client of Anglo Irish Bank during the bubble era.

Mr Kearney was a member of the so-called Maple 10, a group of developers to which Anglo loaned money in 2008, to buy its shares in an effort to stabilise their price. Nama took over property-related loans from Anglo and the Republic’s other banks through 2010 and 2011. The agency acquired PBN’s debts during this period.

Contract

The agency said yesterday it cannot comment on individual borrowers. However, a spokesman pointed out that interest continued to accrue on all loans based on the outstanding principal in accordance with contractual terms.

“The ability of a debtor to meet those interest payments is entirely dependent on available cashflow,” he said. “Nama’s practice was to capture all income generated by the assets securing its loans and to seek additional security where available.”

Earlier this week, Mr Kearney told a Northern Ireland Assembly committee investigating the sale of Nama's northern-linked loans to Cerberus, that the agency had sought to "frighten and intimidate" him into giving up control of his company.

In response, Nama said its objective was to maximise returns to Irish taxpayers, which sometimes led to “robust engagement” with developers.