Dáil Éireann Debate, Tuesday - 8 April 2014
101. Deputy Luke 'Ming' Flanagan asked the Minister for Finance the amount of interest the €25 billion we borrowed to buy off the promissory notes is costing us this year; and if he will make a statement on the matter. [16236/14]
View answer102. Deputy Luke 'Ming' Flanagan asked the Minister for Finance the amount of interest the €25 billion we borrowed to buy off the promissory notes cost us in 2013; and if he will make a statement on the matter. [16237/14]
View answer103. Deputy Luke 'Ming' Flanagan asked the Minister for Finance as the new sovereign bonds from the €25 billion in bonds that were issued to the Central Bank on 8 February 2013 are sold off, the amount in interest projected to be paid on an annual basis, for as far into the future as those projections have been made, to the EU fund from which the €25 billion was borrowed and as coupon to the private investors who purchase those bonds; and if he will make a statement on the matter. [16238/14]
View answerI propose to take Questions Nos. 101 to 103, inclusive, together.
The National Treasury Management Agency (NTMA) issued eight new Floating Rate Treasury Bonds to the Central Bank of Ireland (CBI) on 8 February 2013 to replace the Promissory Notes previously held by IBRC.
The bonds have maturities ranging from 25 to 40 years and pay interest every six months in mid-June and in mid-December based on the six-month Euribor interest rate plus an interest margin which averages 2.63% across the eight issues. Total cash interest on the floating rate bonds in 2013 was just under €0.65 billion. Cash interest payable in 2014 is currently estimated to be just under €0.8 billion, the increase compared to 2013 largely reflecting the fact that a full year's interest is payable this year. Interest payable on the bonds is currently projected to increase in the coming years, consistent with the projected increase in the six-month Euribor interest rate.
The CBI is presently the holder of the entire portfolio of these floating rate bonds and on that basis, interest payable is currently accruing to the CBI. The CBI has undertaken that bonds to the minimum value indicated will be sold in accordance with the following schedule: €0.5 billion to end-2014, €0.5 billion per annum in 2015-2018, €1 billion per annum in 2019-2023 and €2 billion per annum from 2024 onwards. Interest payable will accrue to the purchaser of the bonds, rather than the CBI, once the bonds are sold.
