Richard Bruton (Dublin North Central, Fine Gael)
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Question 138: To ask the Minister for Finance the value of new maturing borrowings by the State that will have to be placed during 2009; and the estimated premium over the European Central Bank rate at which he expects them to be placed. [5592/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The National Treasury Management Agency (NTMA) have advised me that Ireland has a net financing need of some €24.5 billion in 2009. This is based on:

the forecast Exchequer Borrowing Requirement of €18 billion as set out in the Addendum to the Stability Programme Update;

the refinancing of a €5 billion bond which matures in April; and

some €1.4 billion in respect of the frontloading of the Exchequer contribution for 2010 for the National Pension Reserve Fund in relation to the bank recapitalisation programme.

The European Central Bank has two lending rates — the interest rate on main refinancing operations (which provide the bulk of liquidity to the banking system) currently stands at2%; the interest rate on the marginal lending facility (which offers overnight credit to banks from the Eurosystem) currently stands at 3 per cent. These rates are short-term rates available to banks.

The NTMA intends to raise funds on the long-term government bond market through a combination of auctions and syndicated loans. It already successfully raised a five-year €6 billion bond at a coupon of 4% in early January. The yield on 10-year Irish Government Bonds is currently around 5.2%. For commercial reasons, the expected yield on bonds to be issued in 2009 is not disclosed.