Tuesday, 19 February 2013

Questions (254)

Gerry Adams


254. Deputy Gerry Adams asked the Minister for Finance if he will provide granular detail on a transactional and cash basis on the way the Bank of Ireland was repaid or is to be repaid for its one year repurchase agreement with the Irish Bank Resolution Corporation that was due to expire in June 2013; if he will confirm further to his public statements on RTE radio on the 8 of February 2013 that the Government bonds which the Central Bank of Ireland has agreed to sell are tranches of the Irish government bond that was owned by IBRC but held by Bank of Ireland; if he will detail after the liquidation of IBRC who became the economic owner of the Irish Government bond issued to IBRC in March of 2012 and held by Bank of Ireland in a repurchase agreement with IBRC; and if he will make a statement on the matter. [8283/13]

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Written answers (Question to Finance)

The repurchase transaction entered into by Bank of Ireland and IBRC was a commercial agreement and had been explained to the Bank’s shareholders in a comprehensive 89 page circular sent to shareholders, with the transaction having been approved by shareholders at an EGM. The State, having been deemed a Related Party to the transaction, under Stock Exchange rules, did not vote its 15% shareholding at that EGM. As part of the transactions relating to the Liquidation of IBRC, the bond repo agreement between IBRC and Bank of Ireland was terminated on a no gain/no loss basis and the Central Bank acquired the bond.

I can confirm that the Irish Government Bonds which the Central Bank has committed to sell include the 2025 Irish Government Bond that was owned by IBRC but held by Bank of Ireland.

This bond will be placed in the trading portfolio of the Central Bank, along with the bonds acquired in exchange for the Promissory Notes. The Central Bank will sell these bonds but only when such a sale is not disruptive to financial stability. The Central Bank have undertaken that minimum of bonds will be sold in accordance with the following schedule: €0.5bn by the end of 2014, €0.5bn per annum from 2015 to 2018, €1bn per annum from 2019 to 2023 and €2bn per annum from 2024 onwards.

Question No. 255 answered with Question No. 240.