Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

Question 110: To ask the Minister for Finance if, with respect to Parliamentary Question No. 349 of 6 October 2009, he will elaborate on his assertion that dated subordinated debt already guaranteed under the credit institutions financial support scheme will remain guaranteed under the CIFS scheme due to the irrevocable nature of the CIFS guarantee; his views on whether any debt, whether senior or subordinated, guaranteed under the original CIFS should remain guaranteed until the maturity date of that debt; if he will prepare an extension to the guarantee to this effect; and if he will make a statement on the matter. [35651/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

As the Deputy is aware on 16 September last, I published an outline of the main elements of the proposed new guarantee scheme for longer term funding, called the draft Credit Institutions (Eligible Liabilities Guarantee) Scheme or ELG scheme. The ELG scheme must be approved in accordance with EU State aid rules and discussions are continuing in this regard with the European Commission. The ELG scheme is intended to facilitate the ability of credit institutions in Ireland to issue debt securities and take deposits with a maturity post-September 2010 of up to five years, on either a guaranteed or unguaranteed basis.

As I have previously remarked, the new scheme will be somewhat more targeted, and in this regard dated subordinated debt or asset covered securities issued after the introduction of the ELG scheme will not be guaranteed either under the ELG scheme or under the Credit Institutions (Financial Support) Scheme (the 'CIFS Scheme') .

However, all liabilities guaranteed under the CIFS Scheme, including dated subordinated debt, as at the commencement date of the ELG scheme (and in respect of a participating institution, as at the date it avails of a guarantee for the first time under the ELG scheme) will remain unconditionally and irrevocably guaranteed under and in accordance with the terms of the CIFS scheme, in other words, existing liabilities will remain guaranteed under the CIFS scheme until the maturity of the debt or the 29 September 2010, whichever is the earliest. This continued guarantee of existing liabilities is in accordance with the general nature of guarantees. The ELG scheme will apply to new debt issued or deposits accepted by participating institutions in accordance with the terms of the ELG scheme.