Dáil Éireann Debate, Thursday - 14 February 2013
136. Deputy Michael McGrath asked the Minister for Finance the initial floating interest rate coupon on each tranche of Government bonds issued under the revised promissory note arrangements; and if he will make a statement on the matter. [7904/13]
View answerAs the Deputy will be aware the Irish Government Bonds that have been issued in exchange for the Promissory Notes are floating rate bonds. The coupon on these bonds is 6-month Euribor plus a margin ranging from 2.50% to 2.68%. On the 8th February 2013 the NTMA announced that following the agreement between the Government and the ECB, it had, at the direction of the Minister for Finance, completed the exchange with the Central Bank of Ireland of Irish Government Bonds for the Promissory Notes previously held by IBRC. As a result, the Minister for Finance’s liability under the Promissory Notes has been discharged and the Promissory Notes cancelled.
For this purpose eight new Floating Rate Treasury Bonds for a total amount of €25 billion have been issued with maturities ranging from 25 to 40 years. The bonds will pay interest every six months (June and December) based on the 6-month Euribor interest rate plus an interest margin which averages 2.63% across the eight issues. Six month Euribor is currently 0.372%.
The initial floating interest rate coupon on each of the 8 tranches is as follows:
- a 5 year bond of €2bn maturing in 2038 with an interest rate of 6-month Euribor plus a margin of 2.50%;
- a 28 year bond of €2bn maturing in 2041 with an interest rate of 6-month Euribor plus a margin of 2.53%;
- a 30 year bond of €2bn maturing in 2043 with an interest rate of 6-month Euribor plus a margin of 2.57%;
- a 32 year bond of €3bn maturing in 2045 with an interest rate of 6-month Euribor plus a margin of 2.60%;
- a 34 year bond of €3bn maturing in 2047 with an interest rate of 6-month Euribor plus a margin of 2.62%;
- a 36 year bond of €3bn maturing in 2049 with an interest rate of 6-month Euribor plus a margin of 2.65%;
- a 38 year bond of €5bn maturing in 2051 with an interest rate of 6-month Euribor plus a margin of 2.67%; and
- a 40 year bond of €5bn maturing in 2053 with an interest rate of 6-month Euribor plus a margin of 2.68%.
This information is set out in tabular form on the NTMA’s website at the following link: http://www.ntma.ie/news/ntma-issues-eight-new-floating-rate-treasury-bonds-in-exchange-for-promissory-notes/.
