Dáil Éireann Debate, Friday - 6 September 2019
99. Deputy Joan Burton asked the Minister for Finance the repayment schedule for bilateral loans to the UK; the capital amount repaid to date by transaction; the amount outstanding; if the repayments are made in sterling or euro; the cost to date in euro of each repayment in tabular form; and if he will make a statement on the matter. [35411/19]
View answer100. Deputy Joan Burton asked the Minister for Finance the cost in euro of each sterling interest repayment to date on bilateral loans from the UK; the applicable interest rate in each case; the projected interest costs for the remainder of 2019 and in 2020, in tabular form; and if he will make a statement on the matter. [35412/19]
View answer101. Deputy Joan Burton asked the Minister for Finance the projected savings in 2019 and 2020 respectively to date on repayments on loans to the UK due to the fall in the value of sterling by interest and capital amounts; and if he will make a statement on the matter. [35413/19]
View answerI propose to take Questions Nos. 99 to 101, inclusive, together.
The UK bilateral loan is a sterling loan which was drawn down in eight equal tranches of £0.4bn. The first tranche was drawn in October 2011 and the last in September 2013. At its peak, the loan totalled £3.2bn.
Each tranche is repayable seven and a half years after disbursement. Principal repayments are made in sterling. The first £0.4bn tranche of the loan was repaid in April of this year and the second in July. Therefore, a total of £0.8bn has so far been repaid, which leaves £2.4bn outstanding. The euro equivalent value of the principal repayments made to date is €1.1bn and that of the six future repayments is €2.8bn. These figures include the impact of currency hedging transactions.
The principal repayment schedule, including the two tranches already repaid, is set out in the following table.
|
Year |
Month |
Repayment £bn |
|
2019 |
Apr |
0.4 |
|
|
July |
0.4 |
|
|
Sep |
0.4 |
|
2020 |
Feb |
0.4 |
|
|
Apr |
0.4 |
|
|
Sep |
0.4 |
|
|
Dec |
0.4 |
|
2021 |
Mar |
0.4 |
Each of the eight individual tranches of the loan is at a fixed interest rate. Including a service fee of 0.18%, the weighted average sterling interest rate across the tranches was 2.6%, with the rates on the individual tranches ranging from 2.31% to 3.37%. Following the first two of the principal repayments, the weighted average sterling interest rate has fallen to just below 2.5%.
The National Treasury Management Agency, in its role in managing the National Debt, hedged the currency exposure on the UK bilateral loan. This means that any sterling appreciation or depreciation against the euro does not materially affect the aggregate euro equivalent value of the interest and principal repayments. The issue of interest savings from sterling depreciation therefore does not arise.
Interest is payable twice annually, in June and in December. Accrued interest is also paid at the point of maturity. Interest payments are in sterling. The euro equivalent values of each interest payment to date, including the 0.18% fee, are set out in the following table. The figures include the impact of hedging.
|
Year |
Month |
€m equivalent |
|
2019 |
Jul |
1 |
|
|
Jun |
30 |
|
|
Apr |
4 |
|
2018 |
Dec |
36 |
|
|
Jun |
36 |
|
2017 |
Dec |
36 |
|
|
Jun |
36 |
|
2016 |
Dec |
37 |
|
|
Jun |
37 |
|
2015 |
Dec |
36 |
|
|
Jun |
35 |
|
2014 |
Dec |
36 |
|
|
Jun |
34 |
|
2013 |
Dec |
37 |
|
|
Jun |
27 |
|
2012 |
Dec |
11 |
|
|
Jun |
22 |
|
2011 |
Dec |
4 |
The estimated euro equivalent interest payments for the remainder of 2019 and the full year 2020 are approximately €25m and €30m respectively.
