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Promissory Note Negotiations

Dáil Éireann Debate, Tuesday - 25 September 2012

Tuesday, 25 September 2012

Ceisteanna (129)

Pearse Doherty

Pearse Doherty

Pearse Doherty

Ceist:

129. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 283 of 18 September 2012, if he will clarify the position regarding the interest on the promissory notes, providing a breakdown of the interest which will be submitted by IBRC or if the interest will be passed on to the Central Bank of Ireland; if he will provide a breakdown of the amount and the way that this will happen; and if any of the interest will eventually be returned to the State. [40583/12]

Amharc ar fhreagra

Freagraí scríofa

Michael Noonan

Minister for Finance

The Bank, including the former INBS, has been provided with promissory notes to the value of €30.6bn consisting of a number of tranches. Each tranche pays a market based fixed rate of interest which is set on the date of issue and is appropriate to the maturity date of the tranche. The promissory notes pay 10% of the initial principal amount of each tranche annually. Interest to be earned by IBRC on the promissory notes will, over their contractual life, total €16.8 billion.(table attached) As the Deputy is aware IBRC provides details of sale and repurchase agreements with Central Banks in their published accounts. This figure amounts to C €42.3bn as at 30 June 2012 (Interim Accounts). However, as I have already indicated that while there is an implicit link between the current repayment schedule on the Promissory Note and ELA there is no specific repayment schedule, as such, in relation to ELA.

Finally, while not issuing a revised projection the bank remains of the view that there will be a small return to the State at full resolution, given the assumptions currently being used.

Set out in the table is a detailed aggregated schedule of capital repayments and interest payments on the promissory notes:

€bn

Total interest 

Paid: A

Total Capital Reduction: B

Repayments:

A + B

-

31/03/2011

            0.55

              2.51

            3.06

-

31/03/2012

               -  

              3.06

            3.06

**

31/03/2013

            0.49

              2.57

            3.06

-

31/03/2014

            1.84

              1.22

            3.06

-

31/03/2015

            1.75

              1.31

            3.06

-

31/03/2016

            1.65

              1.41

            3.06

-

31/03/2017

            1.55

              1.51

            3.06

-

31/03/2018

            1.44

              1.62

            3.06

-

31/03/2019

            1.32

              1.74

            3.06

-

31/03/2020

            1.19

              1.87

            3.06

-

31/03/2021

            1.06

              2.00

            3.06

-

31/03/2022

            0.91

              2.15

            3.06

-

31/03/2023

            0.75

              2.31

            3.06

-

31/03/2024

            0.57

              1.52

            2.09

-

31/03/2025

            0.45

              0.47

            0.91

-

31/03/2026

            0.39

              0.52

            0.91

-

31/03/2027

            0.33

              0.58

            0.91

-

31/03/2028

            0.26

              0.65

            0.91

-

31/03/2029

            0.19

              0.73

            0.91

-

31/03/2030

            0.10

              0.81

            0.91

-

31/03/2031

            0.01

              0.05

            0.05

-

-

            16.8

              30.6

            47.4

-

* These numbers may not tot exactly as a result of rounding

** The March 2012 repayment was settled with a long term Government bond.

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