Dáil Éireann Debate, Tuesday - 14 July 2015
300. Deputy Pearse Doherty asked the Minister for Finance the number and value of floating bonds held by the Central Bank of Ireland as a result of the liquidation of the Irish Bank Resolution Corporation, the planned disposal schedule originally agreed, and any changes to this schedule; the number and value disposed of to date, and the value of those bonds which have matured. [28881/15]
View answer301. Deputy Pearse Doherty asked the Minister for Finance the interest rates on floating bonds held by the Central Bank of Ireland as a result of the liquidation of the Irish Bank Resolution Corporation; and the interest rates of those sold by the bank to date. [28882/15]
View answerI propose to take Questions Nos. 300 and 301 together.
As part of the liquidation of IBRC in February 2013, the NTMA issued eight Floating Rate Bonds to the Central Bank of Ireland (CBI).
Details of the maturity dates, the nominal amounts issued and the interest margins applying to each of the eight Floating Rate Bonds are outlined in the following table.
|
Floating Rate Bond |
Maturity |
Nominal Amount Issued €m |
Margin % |
|
Floating Rate Treasury Bond 2038 |
18/06/2038 |
2,000 |
2.50 |
|
Floating Rate Treasury Bond 2041 |
18/06/2041 |
2,000 |
2.53 |
|
Floating Rate Treasury Bond 2043 |
18/06/2043 |
2,000 |
2.57 |
|
Floating Rate Treasury Bond 2045 |
18/06/2045 |
3,000 |
2.60 |
|
Floating Rate Treasury Bond 2047 |
18/06/2047 |
3,000 |
2.62 |
|
Floating Rate Treasury Bond 2049 |
18/06/2049 |
3,000 |
2.65 |
|
Floating Rate Treasury Bond 2051 |
18/06/2051 |
5,000 |
2.67 |
|
Floating Rate Treasury Bond 2053 |
18/06/2053 |
5,034 |
2.68 |
Interest is paid semi-annually on the Floating Rate Bonds, on 18 June and 18 December each year. Interest is based on the 6 month Euribor interest rate, plus the individual margins applying to each of the eight bonds.
Interest paid on 18 June 2015 was €348 million and reflected the outstanding balance of €24,534 million at the time of the payment as well as the 6 month Euribor interest rate from mid-December 2014 (0.18 per cent) plus the individual margins. The interest payment in December 2015 will reflect the balance outstanding at that time as well as the 6 month Euribor interest rate from mid-June 2015 (0.05 per cent) plus the individual margins.
The minimum disposal schedule agreed at the time the bonds were issued is outlined below. There have been no changes this minimum disposal schedule. Any deviation from the minimum disposal schedule must take account of financial stability considerations.
- By end-2014: €500 million
- 2015-2018: €500 million per annum
- 2019-2023: €1,000 million per annum
- 2024 onwards: €2,000 million per annum until all of the Floating Rate Bonds have been sold
In December 2014, the NTMA purchased from the CBI and subsequently cancelled €500 million nominal of the Floating Rate Treasury Bond maturing in 2038. In June 2015, the NTMA purchased from the CBI and subsequently cancelled a further €500 million nominal of this same bond.
The residual nominal balance on this 2038 bond has therefore been reduced to €1,000 million and the overall nominal balance across the eight Floating Rate Bonds to €24,034 million.
