In my Budget Statement I mentioned that discussions were in progress on what might be done to meet the requirements of life assurance companies and pension funds for a longer-term security to match the maturities of their liabilities.
As a result of these discussions, I am now announcing the creation of £10,000,000 6½ per cent Exchequer Stock, 2000-2005, at an issue price of £95 which gives a yield to final redemption of £6 16s 8d. The life of the stock is 33 to 38 years as against the usual life for National Loans of 20 to 25 years or less.
This issue is to be what is called a "tap" issue. This means that sufficient of the stock is being created to meet requirements for a year or more ahead. The amount not taken by the market on the date of issue will be taken up by the departmental funds under my control and sold through the Government Stockbroker to meet demands at current market prices from time to time. Applications for the stock on issue must be for not less than £5,000 but, of course, when the stock comes on the market, there will be no minimum. The regular National Loan will be issued, as usual, in the late autumn to cater for the requirements of investors in general.
The management of the new stock will be given to the Central Bank.
Deputies will also be interested to know that, to improve the marketability of Government stocks, I have arranged that the Government Stockbroker will in future buy and sell the new stock and existing stocks in amounts totalling up to £100,000 on any day at the opening price for that day and additional amounts at the appropriate market price.
These arrangements are important steps in the development of a more active capital market in Ireland and in adapting our financial institutions to the requirements of our developing economy.