On July 28th this year, I was happy to welcome the receipt of €1.76 Billion to the State following the repayment of the Contingent Capital Note (CoCo) by AIB. The CoCo was issued by AIB in July 2011 with a set five year maturity; the repayment was a contractual commitment, written into the terms of the instrument. AIB returned the full capital value of the instrument, plus accrued interest of €160m, to the exchequer.
Given the predictable nature of the CoCo instrument's maturity, the return of capital and associated interest payments have been included in the exchequer planning calculations over the last number of years. As a non-recurring income, the payment does not impact the available fiscal space or the ongoing budget process. The capital repayment has reduced the State's borrowing requirements this year and can be seen as an effective reduction in national debt.