Dáil Éireann Debate, Thursday - 3 July 2014
61. Deputy Catherine Murphy asked the Minister for Finance the current schedule of sale; the cost/estimated total cost of the current €25 billion borrowing used to fund the bond issue, broken down on a yearly basis up to and including 2032; when the final bonds are scheduled to be sold; and if he will make a statement on the matter. [28951/14]
View answerI have been advised by the Central Bank that subsequent to the liquidation of IBRC, the Bank acquired €25bn of Floating Rate Notes (FRNs) and €3.46bn of Government Fixed Coupon 2025 bonds. The Central Bank's Annual Report for 2013 indicates that it intends to sell the combined portfolio of the FRNs and the fixed rate bond as soon as possible, provided conditions of financial stability permit. The Bank also indicates that, as a minimum, it will sell securities in accordance with the following schedule: to end 2014 (€0.5 billion), 2015-2018 (€0.5 billion per annum), 2019-2023 (€1 billion per annum), and 2024 on (€2 billion per annum until all bonds are sold).
The Annual Report also notes that, as part of this strategy, the Bank sold €350 million of its holdings of the Government 2025 Fixed Rate Bond in 2013.
I have been advised by the NTMA that total cash interest payable on the floating rate bonds in 2013 was €638 million. Following last month's rate reset in respect of the December 2014 interest payment, total cash interest payable in 2014 is presently expected to be just over €750 million. The increase in interest payable in 2014 compared to 2013 largely reflects the fact that a full year's interest is payable this year. Interest payable on the floating rate bonds is currently projected to increase in the coming years, consistent with the projected increase in the six-month Euribor interest rate as the interest margins on the floating rate bonds are fixed. The interest margin averages 2.63% across the eight issues. The Central Bank may, as initial holder of the bonds, exchange the bonds for fixed rate bonds issued by the NTMA subject to the terms of the Exchange Option Deed dated March 2013 (which can be accessed at http://www.ntma.ie/download/government_bonds/ExchangeOptionDeed.pdf).
