Written Answers Nos. 191-209
191. Deputy Pearse Doherty asked the Minister for Finance if he will confirm when the window in which the Special Liquidator of Irish Bank Resolution Corporation is allowing existing borrowers to refinance their loans 100%, is to expire. [18445/13]
View answerI have been informed by the Special Liquidators that the window in which Borrowers are allowed to refinance their loans 100% will remain open until such time as the loan is sold in the sales process.
192. Deputy Pearse Doherty asked the Minister for Finance if he will confirm when the Special Liquidator of Irish Bank Resolution Corporation will commence offering loans to the market for sale. [18446/13]
View answerI have been advised that the Special Liquidators are unable to confirm at this point when the loans of IBRC (in Special Liquidation) will be offered to the market for sale. The loan sales process is currently being finalised.
193. Deputy Pearse Doherty asked the Minister for Finance if he will provide a breakdown of other debt management expenses of €38.27m in the March 2013 Exchequer Statement showing description of cost and recipient. [18447/13]
View answerThe end-March Exchequer Statement shows that debt management expenses in the first quarter of 2013 were €38.27 million. This was almost €22 million lower than the corresponding period in 2012. A breakdown of debt management expenses in Quarter 1 2013 is provided in the following table.
|
€m |
Quarter 1 2013 |
|
Total Debt Management Expenses – of which: - Fees and Expenses – of which: Debt Expenses including facility fees State Savings Expenses - Expenses of NTMA |
38.27 27.55 19.46 8.10 10.72 |
Rounding may affect totals
Debt expenses including facility fees, which totalled €19.46 million in the first quarter, primarily cover expenses related to debt issuance, such as the 10 year €5 billion benchmark Government bond issued in March and the €2.5 billion syndicated tap of the October 2017 Treasury Bond in January. A total of some €11.9 million in syndication fees was paid to the joint-lead managers and the co-lead managers of these two syndications. These are the standard fees for the issue of bonds of these maturities by syndication in the euro area sovereign bond market and are also, for example, the fees paid by the European Investment Bank which has a 'AAA' credit rating.
There were also debt expenses paid to the Danish National Bank, Swedish National Debt Office and the IMF in respect of EU/IMF Programme loans. The amounts were €1 million, €1.5 million and €4.8 million respectively and made up the bulk of the remainder of debt expenses.
State savings expenses reflect the expenses associated with the State savings products such as Savings Bonds, the National Solidarity Bond, Saving Certificates, National Instalment Savings and Prize Bonds. An Post and the Prize Bond Company are agents of the NTMA in respect of these State Savings products. Payments of €5 million and €3.1 million were made to An Post and the Prize Bond Company respectively.
Expenses of the NTMA relate to the net funds drawn down from the Exchequer to cover the NTMA’s administrative costs.
195. Deputy Pearse Doherty asked the Minister for Finance if he will confirm the approximate cost of capital at the National Asset Management Agency. [18449/13]
View answerI am advised by NAMA that its cost of capital is currently less than 1.5% per annum. NAMA has entered into interest rate hedging which acts as an insurance mechanism to hedge its interest expense against interest rates increases over its lifetime. NAMA's cost of funds derives from both the interest cost on its debt securities and its hedging cost. NAMA's cost of funds will vary over the lifetime of NAMA, depending on the mix of its liability base, the associated costs of these liabilities and its hedging strategy.
196. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 91 on 21 March 2013, if he considers the 4,000 homes that the National Asset Management Agency controls which are vacant to be distorting rent levels in the urban areas where NAMA says the majority of its housing is located. [18450/13]
View answerAs advised in the response to Parliamentary Question No. 91, all properties securing NAMA’s loans are ultimately available for rent or sale. As advised in my response to Parliamentary Question 91, of the completed residential property securing NAMA's loans, approximately 10,000 units are currently rented, primarily in the private rented market. The residual NAMA residential stock is being actively marketed for rent or sale by NAMA debtors and receivers at market prices or has been made available for social housing or is currently being marketed under the Agency's 80/20 Deferred Payment Initiative. According to the most recent Census there are over 320,000 private rental properties in the country. Therefore, the scale of NAMA's vacant homes is not large enough to distort the market.
197. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 272 on 29 January 2013, the reason it has taken nearly two years for the Financial Regulator to validate the process of the transfer of tranches 3 and 4 to the National Assets Management Agency where the par value of the loans was €19.2 billion and the NAMA acquisition was completed in June 2011. [18451/13]
View answerWhile I cannot comment on the work undertaken by the Financial Regulator, as the Deputy will be aware the validation process is complex and the work is essential to ensure that the European Commission guidelines ensuring full transparency in relation to state aid are complied with. I am advised that the process to have the final tranches validated is in its final phase and will be concluded shortly; at that point my Department will be in a position to apply to the European Commission for its full approval.
198. Deputy Pearse Doherty asked the Minister for Finance if he will confirm the total number of individuals who are debtors of the National Asset Management Agency who have filed for bankruptcy outside the jurisdiction of the State. [18452/13]
View answer199. Deputy Pearse Doherty asked the Minister for Finance if he wil provide an estimate of the total amount of original par value debt written off by the National Asset Management Agency as a result of debtors filing for bankruptcy outside the jurisdiction of the State. [18453/13]
View answerI propose to take Questions Nos. 198 and 199 together.
NAMA is currently finalising its Annual Report and Financial Statements for 2012. I am advised that these will contain extensive information regarding its operations, including its insolvency activity and the locus of debtor bankruptcy proceedings. I am advised that the Report and statements will be published within two months. NAMA advises that it does not write off debt as a result of debtors filing for bankruptcy outside the jurisdiction of the State. Rather, it is a matter for the bankruptcy proceedings to deal with the outstanding debt. NAMA advises that even where the bankruptcy is discharged, the bankruptcy estate continues until such time as all assets have been liquidated and the debt, in so far as possible, has been repaid.
200. Deputy Pearse Doherty asked the Minister for Finance if he will confirm the total value of bonds issued by the National Asset Management Agency as part of the special liquidation of the Irish Bank Resolution Corporation. [18454/13]
View answerThe face value of bonds issued by NAMA as part of the special liquidation of IBRC was €12.93 billion.
201. Deputy Pearse Doherty asked the Minister for Finance if he will outline the process by which remaining unsold assets at the Irish Bank Resolution Corporation will be acquired by the National Asset Management Agency, including a description of the way NAMA will value the assets; and if the valuation will be subject to international scrutiny and the anticipated timing of the acquisitions. [18455/13]
View answerAs previously advised, independent third parties are being engaged to independently value the loan assets of IBRC (in Special Liquidation). For the purposes of the valuation, loan assets shall be valued using discounted cash flow analysis, taking into account the timing and reliability of cash flows, together with an appropriate discount factor to determine the value or, where appropriate, in accordance with other standard loan valuation methodologies. There is an obligation on the Special Liquidators to ensure that assets of IBRC are sold at a price that is equal to or in excess of the independent valuations that are being obtained. The Special Liquidators have advised that these valuations will be confidential. Should a bid not be received that is equal to or in excess of the independent valuation obtained, the loan will transfer to NAMA at the independent valuation price. As the Special Liquidators are still in the process of devising and implementing the valuation and sales process it is not possible at this time to estimate the timing of the potential acquisitions.
202. Deputy Pearse Doherty asked the Minister for Finance if he will confirm when he expects to know the valuation of the assets at Irish Bank Resolution Corporation by the special liquidator; and the way any shortfall in the value of IBRC’s assets compared with the NAMA bonds issued for IBRC assets be dealt with in the Exchequer Statement in 2013. [18456/13]
View answerI have been advised that independent third parties are being engaged to value the loan assets of IBRC (in Special Liquidation). There is an obligation on the Special Liquidators to ensure that assets of IBRC are sold at a price that is equal to or in excess of the independent valuations that are being obtained. The Special Liquidators have indicated that these valuations will be confidential. A process is currently being finalised that ensures that maximum value is extracted from the loan sales. The Special Liquidators are unable to comment at this time as to when this work is expected to be completed. Should a bid not be received that is equal to or in excess of the independent valuation obtained, the loan will transfer to NAMA at the independent valuation price. The shortfall in the value of IBRC's assets compared with the NAMA bonds, if any, will not be known, with any certainty, until the independent valuation and asset sale process has completed. If the value of the assets is insufficient to covers amounts due to NAMA then that shortfall will be compensated by the Exchequer.
203. Deputy Pearse Doherty asked the Minister for Finance if he will confirm the way assets not sold by the special liquidator of Irish Bank Resolution Corporation and not acquired by the National Asset Management Agency, that is employee loans, will be resolved; and what party will monitor the performance of such assets. [18457/13]
View answerAs per the Ministerial instruction of 7 February 2013, NAMA shall not be required to make a bid in respect of "any credit facility pursuant to which IBRC (or Irish Nationwide Building Society ("INBS")) has made facilities available to current or former employees and/ or directors of IBRC or INBS". As previously advised, I have been informed that the Special Liquidators will be managing these facilities, the strategies for which will be devised on a case by case basis.
204. Deputy Pearse Doherty asked the Minister for Finance if he will confirm the date on which Budget 2014 will be presented to Dáil Éireann; and if he will outline the key budget processes and documents to be published, antecedent to the delivery of Budget 2014. [18458/13]
View answerUnder the draft regulations known as the "two-pack" which are expected to be formally adopted in May or June, a common budgetary timeline is being introduced for all Euro area member states. Specifically:
- the draft budget for central government and the main parameters of the draft budgets for all the other sub-sectors of the general government must be published by 15 October each year;
- draft budgetary plans in a common format must be submitted by all Euro area Member States not in a programme of assistance; and
- the budget for the central government must be adopted or fixed upon and published by 31 December each year.
In light of these requirements, the Government has decided to bring Budget Day forward from the first week in December to on or before 15 October from now on. This means that Budget 2014 will be presented and published on Tuesday, 15 October this year. The Government has also decided that the Finance Bill should complete its passage through the Oireachtas by 31 December each year. This timeline will be considerably shorter than the present requirement that it must be enacted within 120 days of the Budget. Under the new arrangements, the Finance Bill will have to be passed 65 to 70 days after the Budget.
Following the Government decision on the timing of the budget, the Departments of Finance and Public Expenditure and Reform are considering the follow-on implications of moving both Budget Day and the Finance Bill forward. However, the key change relates to the timing and, as I have stated before, it means that Government will have to make its budgetary decisions much earlier in the year. It is the intention of both Departments to keep all bodies that contribute to the Budget and Finance Bill processes fully informed of changes so that they can plan accordingly.
There is another requirement in the "two-pack", namely that the macroeconomic forecasts on which the Budget is based must be independently endorsed. Implementation of this requirement is still under consideration. As regards documents to be published antecedent to the delivery of Budget 2014, the Stability Programme Update will be published by the end of April, as usual. It has been normal practice in the last few years to publish a medium-term fiscal statement or equivalent in October/November. As this overlaps with the new budgetary timetable, this is likely to be consolidated into the budget publication from now on. The requirements regarding the White Paper on Expenditure and Receipts have not been altered by these changes.
Finally, the Government will decide later in the budgetary process whether to submit a draft budgetary plan in the common format as Ireland is exempt from this requirement because it is in a programme.
205. Deputy Pearse Doherty asked the Minister for Finance if he will outline the consultations that will take place in relation to Budget 2014, with both national and international parties, together with the nature and timing of those consultations. [18459/13]
View answer206. Deputy Pearse Doherty asked the Minister for Finance if he will outline any special measures that will be adopted in 2013 in order to facilitate consultation prior to deciding on the final measures to be contained in Budget 2014. [18460/13]
View answerI propose to take Questions Nos. 205 and 206 together.
As the deputy is aware, last March, both ECOFIN and the European Parliament agreed on the content of two draft regulations known as the "two-pack". One of the key requirements under the “two-pack” which will impact on our budgetary process is that the draft budget for central government and the main parameters of the draft budgets for all the other sub-sectors of the general government must be published by 15 October each year. In light of this requirement, the Government has decided to bring Budget Day forward from the first week in December to on or before 15 October from now on. This means that Budget 2014 will be presented and published on Tuesday, 15 October this year. The EU/IMF Programme for Financial Support does not include any conditions in relation to the Budget 2014 targets. However, Ireland remains in an Excessive Deficit Procedure, and subject to the relevant requirements under that procedure.
As regards consultation, meetings take place throughout the year between my officials and those of other organisations, such as the NTMA, the Revenue Commissioners and other Government Departments, most notably the Department of Public Expenditure and Reform. The Tax Strategy Group will also have a role here. While specific plans for Budget 2014 have yet to be finalised, it is likely that I will meet personally, as I usually do, with a number of representative organisations. I would also expect to receive many Pre-Budget Submissions from a wide variety of groups and individuals; I received in excess of 600 prior to Budget 2013. These are recorded and distributed as appropriate, both in my Department and in the Department of Public Expenditure and Reform, so that their content may be considered by the relevant officials in the context of Budget preparation.
207. Deputy Pearse Doherty asked the Minister for Finance if he will confirm the value of loans at Irish Bank Resolution Corporation that have been refinanced out of IBRC between 6 February 2013 to date; and if he will confirm that in all cases, the refinancing was for 100% of the outstanding amount on the loan inclusive of all amounts due. [18461/13]
View answerI have been informed that the information requested is commercially sensitive and it would not be appropriate for the Special Liquidators to release such information.
208. Deputy Pearse Doherty asked the Minister for Finance if he will outline the rationale for providing for a €100,000 termination bonus for the Financial Regulator who was appointed in January 2010 and who has recently tendered his resignation to the Central Bank of Ireland. [18462/13]
View answer210. Deputy Pearse Doherty asked the Minister for Finance if he will outline the duties to be performed by the Financial Regulator during his remaining six months employment at the Central Bank of Ireland; and if he will provide the expected salary and allowances to be paid to the Financial Regulator during this period. [18464/13]
View answerI propose to take Questions Nos. 208 and 210 together.
The terms of the contract agreed by the Central Bank with the Deputy Governor Financial Regulation provided for a performance related payment of €100,000 payable on review of performance at the end of the third year of the contract. When Mr. Elderfield's contract was agreed in November 2009 the bonus was part of an agreed remuneration package which involved a 50% pay cut from his salary in Bermuda. Mr. Elderfield subsequently took a 15% cut in his Central Bank salary.
Mr. Elderfield agreed to defer the payment of any possible performance related bonus, which was due in January 2013, as part of his terms and conditions of employment agreed, until the end of his employment with the Bank. Mr. Elderfield has subsequently advised the Commission of the Central Bank that he has waived his €100,000 bonus entitlement at the end of his contract of employment. The Deputy Governor of Financial Regulation will continue performing the duties as outlined in the contract of employment. However, where a conflict of interest could be perceived in supervisory and other issues he will step away with immediate effect from involvement in these issues. Remuneration for the period is as per the terms in the contract of employment.
209. Deputy Pearse Doherty asked the Minister for Finance if he will outline the process for the appointment of a new Financial Regulator; and if the post is likely to be filled before the outgoing Financial Regulator leaves the Central Bank of Ireland in six months. [18463/13]
View answerUnder section 23B of the Central Bank Act 1942 the Central Bank Commission can, with the consent of the Minister for Finance, appoint suitably qualified persons as Heads of Function. I am informed by the Central Bank that the position has been advertised in The Irish Times and will also be advertised in The Economist and the Financial Times. The Central Bank has partnered with an international executive search firm to assist on this assignment. The search and selection process is designed to ensure that the Central Bank identify a shortlist of strong potential candidates and that the best candidate is selected. It is the Central Bank’s intention to identify a preferred candidate as soon as possible; the official start date will depend on the personal circumstances of the successful candidate.
