Patrick O'Donovan (Limerick County, Fine Gael) | Oireachtas source

I apologise for the absence of the Minister for Finance, Deputy Donohoe, who is preparing for the budget.

I agree with much of what has been said. I welcome the broad agreement on the Bill on Committee Stage and the constructive nature of contributions made on Second and Committee Stages.

Some of the points the Deputies raised can be addressed when we are dealing with the second amendment, which is also in the names of Deputies Ó Broin and Pearse Doherty.

Amendment No. 1 seeks to insert the words "including lower interest rates and longer maturities" in line 13 of the Bill. Line 13 states: "... HBFI or any HBFI group entity may create and issue bonds, debentures and other securities, bearing such rate of interest and subject to such conditions as to repayment, redemption or otherwise as HBFI or the HBFI group entity, as the case may be, thinks fit". What the Deputies are seeking to achieve in their amendment, therefore, is catered for in the Bill.

Section 13 provides that HBFI may borrow money for residential development in any currency through any type of debt it sees as appropriate. This section limits the amount of borrowings HBFI can have outstanding at any particular time to €750 million. This figure does not include any loans provided to HBFI from the Ireland Strategic Investment Fund, ISIF, pursuant to this legislation, which was one of the points raised. Other points will be raised in the second amendment. The purpose of this section is to allow HBFI have access to market funding in the event that the demand for lending is such that the funding provided by the State from ISIF is insufficient.

At present, it is not expected that HBFI will need to borrow additional funds as the funding provided by ISIF is expected to be sufficient to meet its business plan forecasts. However, the ability to borrow funding in the market will allow flexibility for HBFI to grow in the future without Government support should the demand exist to do so. That is important because on Committee Stage, and in some of the sentiments expressed here this evening, reference was made to the position if demand exceeds the amounts available. It is important to note that any debt issued by HBFI will not be guaranteed by the State.

Section 13, as drafted, places no restrictions on the rates or conditions that may attached to debt issued by HBFI, which was the point raised in the amendment tabled by Deputies Ó Broin and Pearse Doherty. It is clear, therefore, that the HBFI can issue debt at lower interest rates and longer maturities if it so wishes. Ultimately, however, the terms and conditions of any debt issued by HBFI will be dictated by the market. If HBFI does not issue such debt on terms and conditions that are competitive, it will struggle to find investors in any issued bonds, debentures and other securities and to raise additional funds. I understand the sentiments expressed but it is on that basis that I cannot accept the amendment.

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