IBRC Liquidation

Dáil Éireann Debate, Wednesday - 27 February 2013

Wednesday, 27 February 2013

Questions (64, 94, 95)

Pearse Doherty

Question:

64. Deputy Pearse Doherty asked the Minister for Finance if he will explain the decision to provide €1 billion credit facility from the National Asset Management Agency for the use of the special liquidator of the Irish Bank Resolution Corporation; when the decision was made; what the credit facility is intended to be used for; the way the €1 billion, if used, will be repaid to NAMA; if he had to seek permission to use NAMA for such a credit facility from another entity such as the European Central Bank; if the funding of the credit facility comes from cash assets at NAMA; and if NAMA can still meet its bond repayments due at the end of 2013. [10476/13]

Pearse Doherty

Question:

94. Deputy Pearse Doherty asked the Minister for Finance further to the announcement by the National Asset Management Agency on 21 February 2013 that it has made a €1bn credit line available to Irish Bank Resolution Corporation, if he will confirm the interest rate and arrangement fee that applies to the facility and any moneys advanced under it. [10643/13]

Pearse Doherty

Question:

95. Deputy Pearse Doherty asked the Minister for Finance further to the announcement by the National Asset Management Agency on 21 February 2013 that it has made a €1bn credit line available to Irish Bank Resolution Corporation, if the NAMA action was subject to a NAMA board decision; and if so, the date of the board decision. [10644/13]

Written answers

Minister for Finance

I propose to take Questions Nos. 64, 94 and 95 together.

On the 7th February 2013 I issued a Direction (NAMA/3/12/IBRC Act) to NAMA pursuant to the IBRC Act 2013 to provide such credit facilities to a special liquidator on such terms and conditions, as are specified in the direction. NAMA has complied with this Direction and made a €1 billion credit facility available to the special liquidator. The interest rate as per the facility agreement is referenced to the daily one-month euribor rate plus a margin of 140 basis points. The facility will be advanced to IBRC (in Liquidation) as needed for both the general corporate purposes of the Company and to discharge the Company’s obligations to derivatives counterparties under derivative collateral arrangements and/or obligations to the NTMA under the NTMA ISDA Master agreement. The amounts drawn under this facility shall constitute and rank as costs of the liquidation of the Company.

I am advised by NAMA that following receipt of the Direction, the Board of NAMA met on Thursday, 7th February 2013 and approved the €1 billion facility. NAMA has made this facility available to the Company in accordance with its approved liquidity policy and from its own liquid assets. The granting of this facility does not impact on NAMA’s ability to redeem its senior bonds in accordance with the previously indicated senior bond redemption targets.