Brian Lenihan Jnr (Dublin West, Fianna Fail)

To date in 2010, the Government has committed to giving cash of €31 billion, as I outlined already, in the three promissory notes. As the actual cash is not being paid up-front to the institutions, interest must be paid so the institutions can value the notes at par on their accounts. The terms of the notes allow interest to be rolled out after the principal sums have been repaid. The interest rate is based on the ten-year Government bond yield.

The payment of interest on the promissory note is expected to be rolled forward after the principal payments. For general government accounting purposes, the interest must be accrued to the years in which it arises. The accrued interest, therefore, in 2010 is currently estimated at just over €700 million-----

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