Vol. 474 No. 8
44 Mr. D. Wallace asked the Minister for Finance the total current amount of debt owed by the State and semi-State companies; the ten main individual instances in this regard; and the interest rate currently applying in each case. [3927/97]
The total borrowings of commercial State bodies as at December 31 1996 were £5,638 million. The total borrowings of non-commercial State bodies at the same date amounted to £990 million. This includes borrowings of £423 million by local authorities from the Housing Finance Agency. As the Housing Finance Agency is in the commercial State sector its corresponding borrowings of £423 million are included in the debt of that sector. The overall total debt of both commercial and non-commercial State bodies after disregarding this £423 million amounts to £6,206 million.
The ten major borrowers at 31 December 1996, their borrowings and their average costs of funds are set out in tabular form, a copy of which I will circulate in the Official Report.
It is not possible to draw meaningful conclusions from these global figures because they reflect, for each body, the timing of its borrowings and the interest rates prevailing at those times. For instance, the debt of some of these bodies includes a significant amount of fixed rate borrowings dating from ten to 15 years ago when borrowing rates were as high as 14 per cent; the debt could also include an appreciable amount raised at very low rates of interest through more recent capital financing instruments such as structured finance leases. In the case of ACC, the figures include substantial customers' deposits and, as the Deputy will be aware, demand deposits are currently paying very low rates of interest. Finally, some of these bodies have substantial guaranteed borrowings which attract very competitive interest rates. In sum, the average cost of funds indicated above would not reflect the margins currently being achieved by these bodies in the market.
It is fair to say that all State bodies are currently securing very fine margins in the market and, as older debt comes up for refinancing, it is being replaced by debt financed at a considerably lower cost.
The Ten Major Individual Borrowers in the State Sector
|
Semi-state Body |
Total Borrowings at December 31, 1996 |
Average Cost of Funds |
|
(£m) |
% |
|
|
ACC Bank plc |
1,491.52 |
3.96 |
|
ICC Bank plc |
1,163.70 |
5.76 |
|
ESB |
820.20 |
7.60 |
|
Irish Telecommunications Investments plc |
591.92 |
8.40 |
|
Housing Finance Agency plc |
558.45 |
6.08 |
|
Aer Lingus |
286.10 |
6.30 |
|
Nitrigin Éireann Teo |
155.42 |
7.40 |
|
CIE |
153.62 |
8.73 |
|
Bord Gáis Éireann |
148.93 |
8.00 |
|
Bord na Móna |
128.47 |
7.98 |
|
Total |
5,498.34 |
