Dáil Éireann Debate, Thursday - 22 September 2011
60 Deputy Thomas P. Broughan asked the Minister for Finance his intentions on the paying down of promissory notes for Anglo Irish Bank; the steps he is taking to significantly decrease these payments and the burden on the national budget; and if he will make a statement on the matter. [25480/11]
Amharc ar fhreagra82 Deputy Michael McGrath asked the Minister for Finance his views on the current promissory note structure in respect of the recapitalisation of Anglo Irish Bank; if he will provide details of the changes he is seeking; the steps he has taken in that regard; and if he will make a statement on the matter. [25516/11]
Amharc ar fhreagraI propose to take Questions Nos. 60 and 82 together.
Promissory notes were provided as consideration for the capital introduced by the State into Anglo. Under the terms of the Anglo (including INBS) promissory notes the State has an obligation to make annual repayments of €3.1 billion per annum. Furthermore the interest rates on the promissory notes, which were set by reference to government yields at the time of issue, are relatively high with a weighted interest rate, after the interest holiday, of circa 8%. While the State has budgeted to meet both the interest and cash requirements I keep the Promissory Notes under review to see if they can be re-engineered in a better way for the State. Any re-engineering would have to be completed in a manner which does not impact on the capital position of Anglo. This may or may not be feasible.
I had the opportunity to meet with President Trichet on the margins of the Ecofin meeting in Poland on Saturday, 17th September. President Trichet was very complimentary of the progress being made by Ireland and he noted the narrowing of bond spreads that had taken place, which he would not wish to see put at risk.
I mentioned to President Trichet, and in a separate meeting with Commissioner Rehn, the situation in relation to the Promissory Notes. I proposed that our technical experts get together to examine the technical aspects and the implications of any potential changes. They were agreeable to this on the basis that there is clearly no commitment on their part upfront. We are now proceeding on that basis.
