I move:
That Dáil Éireann approves the following Order in draft:
Trustees (Authorised Investments) Order, 1966,
a copy of which Order in draft has been laid before the House.
The Trustee (Authorised Investments) Act, 1958 defines the investments in which trustees may invest trust funds unless expressly forbidden by the instrument, if any, creating the trust. The Minister for Finance may vary the authorised investments by Order. The primary qualification for trustee investments is that they should be secure, and, subject to this, that they should give a favourable income to the life tenant.
The purpose of the Order before the House for approval is to add Bank of Ireland Loan Stock 1986/91 to the list of trustee authorised investments. The loan stock was issued in connection with the acquisition last year by the Bank of Ireland of the Irish business of the National Bank. Shareholders of the National Bank received 36s 6d in cash and 20s nominal amount of the loan stock for each share held by them. The stock was issued at par and bears interest at 7% per annum.
The total amount of stock issued was £6,000,000 and roughly two-thirds of this was received by Irish shareholders of the National Bank. It is repayable at par between 1986 and 1991. Registered holders have the right to subscribe in cash for an aggregate of £15 nominal amount of Capital Stock of the Bank of Ireland in respect of each £100 nominal amount of the loan stock held by them. The subscription rights will be exercisable on 30th April in the years 1969 to 1971 inclusive at specified prices.
The loan stock is quoted on the Irish and London Stock Exchanges. The price on the Dublin Stock Exchange on 24th November, 1967, was £108 being a premium of £8 on the issue price.
The Capital Stock of the Bank of Ireland has been a trustee investment here and in Britain for about a century. The loan stock has been given trustee status in Britain and I am satisfied that it is a suitable stock for addition to the authorised trustee investments in this country.
The Minister for Finance is obliged under the Act to consult with the following persons in regard to the terms of any order he proposes to make to vary the list of authorised investments—a Judge of the High Court nominated by the Chief Justice, the Governor of the Central Bank, the Public Trustee, the Chairman of the Irish Bank's Standing Committee, the President of the Incorporated Law Society of Ireland, the President of the Dublin Stock Exchange and the President of the Cork Stock Exchange. I have consulted all these persons and they have no objections to the proposed Order.
I recommend the motion for the approval of the House.