asked the Minister for Finance if he will state the full terms of (1) the loan by the Bank of Nova Scotia and (2) the recent loan in Great Britain.
Ceisteanna—Questions. Oral Answers. - Government Borrowings.
16.
The loan from the Bank of Nova Scotia amounted to £5 million and is repayable in equal annual instalments of £500,000 each over a period of ten years. Interest at the rate of 7 per cent per annum is payable half-yearly on the amount of principal outstanding from time to time.
A stock issue amounting to £5 million was made on the London market on 4th August, 1966. The rate of interest was 7½ per cent and the issue price £97 per cent. The stock, if not previously redeemed or cancelled by purchase in the open market, will be redeemed at par not later than 10th July, 1983 and may be redeemed at any time after 10th July, 1981.
17.
asked the Minister for Finance (a) the total amount raised by the London loan; (b) the advice he acted upon in seeking the loan; and (c) whether it is intended to seek other such loans abroad and, if so, where.
The proceeds of the London loan amount to £4,850,000.
The timing and terms of the loan were in accordance with suggestions of the Bank of England and the British Government Stockbroker, given on the basis that the public capital programme could not be reduced so as to postpone for an indefinite period the need for the money. The amount of the issue was the maximum which the British Treasury were prepared to allow.
It would not be prudent for me to say when or where any further foreign borrowings may be sought but as I intimated in my Budget Speech on 9th March, 1966, I hope to keep direct foreign borrowing over the next few years within a moderate annual limit both for balance of payments reasons and because such borrowing, owing to the world shortage of capital, is both difficult and dear.
Can the Parliamentary Secretary say whether the advice the Minister and the Government received related to the timing of the loan?
The advice the Minister received could hardly have been bettered.
The results could hardly be worse.
Was the advice related to the timing of the loan?
Yes.
Perhaps the Taoiseach could now say whether, in fact, the advice was faulty?
I think all the evidence is that it was not.
It was bad advice? Is the Taoiseach satisfied the advice was unsound?
No.
You got only 12 per cent.
We got the money we set out to raise; that is all we wanted.
The underwriters provided the rest.
There were underwriters.
Is it the position that in the case of future loans the Government propose to act on the same kind of advice?
Yes.
God help Ireland.