Dáil Éireann Debate, Tuesday - 24 October 2017
36. Deputy Thomas P. Broughan asked the Minister for Finance the reasons for not repaying the €3.5 billion UK bailout loan early; the net refinancing position of the national debt in each of the years 2018 to 2021, including the refinancing of the UK loan; and if he will make a statement on the matter. [44542/17]
View answer43. Deputy Thomas P. Broughan asked the Minister for Finance if he will report on the schedule of refinancing the national debt in each of the years 2018 to 2020 following the recent buyback of the IMF, Swedish and Danish loans from the financial crash era; and if he will make a statement on the matter. [44541/17]
View answerI propose to take Questions Nos. 36 and 43 together.
In responding to the Deputy I want to make him aware that while I have announced my intention to repay in full the outstanding loans from the IMF together with the Swedish and Danish bilateral loans, none of these loans have, as yet, been repaid. Early repayment will require the agreement of the European lenders, the EFSF and the EFSM, and also the UK to waive the proportionate early repayment clauses in the respective loan agreements. The process for securing these waivers is currently underway.
It is important to be aware of the fact that it is not in Ireland’s financial interests at this time to repay early the bilateral loan from the UK. The UK loan is a fixed rate loan and the loan agreement contains a break clause which would be triggered in the event of early repayment. The associated costs would offset any potential interest savings.
A table showing the maturity profile of Government bonds and EU/IMF Programme loans is updated monthly on the website of the National Treasury Management Agency (NTMA).
As at end-September 2017, there was close to €49 billion of Irish Government bonds and EU-IMF Programme loans scheduled to mature over the four year period 2018-2021.
There are €6.9 billion of loans from the European Financial Stabilisation Mechanism (EFSM) with contractual maturity dates in 2018 and 2021. However, the Deputy should be aware that owing to the maturity extensions granted in 2013, it is not expected that Ireland will have to refinance any EFSM loans before 2027. Therefore these loans do not form part of the €49 billion figure referred to above.
The next repayment to the IMF is scheduled for 2021. A total of 2.35 billion Special Drawing Rights (SDRs) which is equivalent to approximately €2.8 billion are due to be repaid to the IMF that year. The remainder of the IMF loan is scheduled for repayment in 2022 and 2023.
The Swedish and the Danish bilateral loans are scheduled to be repaid with €250 million due in 2019, €500 million in 2020 and €250 million in 2021.
The impact of the early repayments would therefore be to reduce the refinancing requirement over the three year period 2019 to 2021 by €3.8 billion.
