Bank Debt Restructuring

Dáil Éireann Debate, Tuesday - 30 April 2013

Tuesday, 30 April 2013

Questions (158)

Gerry Adams

Question:

158. Deputy Gerry Adams asked the Minister for Finance further to Parliamentary Question No. 252 of 19 February 2013, if he will provide further updates as to the aggregate of the principal of the National Asset Management Agency bonds that shall be issued in consideration for the net debt owed by the Irish Bank Resolution Corporation to the Central Bank of Ireland; if he will explain the reason the National Asset Management Agency had not issued these securities during the week beginning 18 February 2013 as expected and detailed in his ministerial response; if he will confirm based on the way in which the Central Bank of Ireland manages its profits and given these NAMA bonds have euro system eligibility, the longer it takes for these NAMA bonds to be redeemed, the more profits the Central Bank of Ireland can make on the bonds on an annual basis and thus returned to the Irish Exchequer as long as the ECB open market rate remains lower than the interest on the NAMA bonds; and if he will make a statement on the matter. [19873/13]

Written answers

Minister for Finance

I am advised that in order to complete the sale to NAMA by the Central Bank of Ireland (“CBI”) of the net debt owed by the Irish Bank resolution Corporation to the CBI (“amount outstanding under the Facility Deed”) a number of steps had to be completed which involved each of the three parties impacted by the transaction, the CBI, NAMA and the Special Liquidator. To establish the final amount outstanding under the Facility Deed, the credits and obligations arising from all other financing transactions and operational relationships between IBRC and the Central Bank were identified and set off against the amount outstanding under the Facility Deed. Once this process was complete, the Central Bank, NAMA and the Special Liquidators then agreed the final amount outstanding under the Facility Deed prior to the completion of its sale by the Central Bank to NAMA.

On 28 March 2013, NAMA issued €12.928bn of Government Guaranteed Senior Bonds to the CBI in settlement of the purchase of the facility deed. I wish to advise the Deputy that further information regarding these bonds can be found at http://www.nama.ie/about-our-work/how-we-fund-our-work

The way in which the Central Bank of Ireland will manage these bonds is a matter for the Central Bank. They advise that they do not comment on individual investment holdings, as NAMA bonds are managed together with the Bank’s other investment assets, any positive investment return at year end will be the product of the Bank’s investment portfolio in aggregate and not individual investments in isolation.