Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The Department of Finance is in regular contact with officials in the NTMA on a wide range of topics, including the management of the national debt.

Over the period 2018 to 2020, there are five benchmark bonds due to mature. The total balance outstanding on these bonds is currently just over €42 billion. In addition, the majority of the bilateral loans received from the UK, Sweden and Denmark as part of the EU-IMF programme also mature during that period. This brings the total medium-term to long-term debt refinancing requirement over that three year period to approximately €46.5 billion.

The Deputy should be aware that although there are two loans from the European financial stabilisation mechanism, EFSM, totalling €3.9 billion, with contractual maturity dates in 2018, these are due to be refinanced by the European Stability Mechanism, ESM, in light of the maturity extensions granted to EFSM and European Financial Stability Facility, EFSF, loans in 2013. It is not expected that Ireland will have to refinance any EFSM loans before 2027.

The five benchmark bonds maturing over the 2018 to 2020 period carry annual coupons ranging from 4.4% to 5.9%. The expectation is that these bonds can be refinanced at lower coupons based on the current interest rate outlook. The current interest expenditure forecast reflects this expectation. For the period of 2018 to 2020, refinancing requirements have already been significantly reduced in recent years.  Following the early repayments to the IMF of December 2014 and the first quarter of 2015 and their replacement with cheaper long-term market-based funding, the liability to the IMF in that three-year period has been reduced by approximately €11.5 billion. The maturity extensions granted to EFSF and EFSM loans in 2013 and bilateral bond switching have also helped to reduce the refinancing requirements over that period by over €7 billion. The NTMA has also built up significant cash balances as part of its pre-funding strategy. These are expected to be of the order of €10 billion at the end of 2017.  These transactions leave the Exchequer in a healthy position to fund the 2018 to 2020 refinancing requirement.

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