Pearse Doherty (Donegal South West, Sinn Fein)
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Question 76: To ask the Minister for Finance the sovereign bonds that are maturing over the next six years; the amount this will this cost year-on-year for the next six years; and if he will make a statement on the matter. [3042/11]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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1Irish Government Bonds maturing over the next six years are set out in the table below.

In addition to the above I would advise the Deputy that the €5 billion EFSM loan drawn down on 12 January 2011 is due for repayment on 4 December 2015 while the first tranche of IMF funding, amounting to approximately €5.8 billion, was drawn down on 18 January 2011. All funds drawn from the IMF will be repaid by a series of twelve equal semi-annual repayments beginning 4.5 years after the drawdown and finishing on the tenth anniversary of the drawdown.

The debt service estimates underpinning the Budget 2011 public finance forecasts are set out below. Projections are not currently available for the years beyond 2014.

* Figures in table based on forecasts contained in Budget 2011

Pearse Doherty (Donegal South West, Sinn Fein)
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Question 77: To ask the Minister for Finance the total interest in relation to the total draw-down in 2011 from the EU-International Monetary Fund programme; if he will provide a year-on-year breakdown of the total interest to be paid as a result of the drawing of funds down from the EU-IMF programme; and if he will make a statement on the matter. [3043/11]

Pearse Doherty (Donegal South West, Sinn Fein)
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Question 78: To ask the Minister for Finance when the capital on each input of the EU-International Monetary Fund programme will be repaid; and if he will make a statement on the matter. [3044/11]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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2057I propose to take Questions Nos. 77 and 78 together.

There is provision under the EU-IMF Programme for external assistance amounting to €67.5bn to be made available to Ireland as follows

- €22.5 billion from the European Financial Stabilisation Mechanism (EFSM)

- €22.5 billion from the European Financial Stability Facility (EFSF) and

bilateral loans from the UK, Sweden and Denmark

- €22.5 billion from the IMF.

The average (blended) interest rate on the €67.5 billion available to be drawn from these three external sources was estimated to be 5.82 per cent on the basis of market rates at the time of the agreement. The actual cost will depend on the prevailing market rates at the time of each drawdown and could be higher if market rates have deteriorated. The average life of the borrowings, which will involve a combination of longer and shorter dated maturities, under each of these sources is 7.5 years.

The total amount to be drawn down in 2011 will be determined by Exchequer funding and bank recapitalisation requirements. The total interest costs will be determined by the total amount drawn down and the interest rate applying to the various tranches. The position to date in 2011 is as follows.

The first drawdown of IMF funds under the Programme took place on 18 January 2011. The amount was SDR 5,012,425,200, equivalent to some €5.8 billion. All funds drawn from the IMF under the Programme will be repaid by a series of twelve equal semi-annual capital repayments of the initial amount beginning 4.5 years after the drawdown and finishing on the tenth anniversary of the drawdown. Interest will be paid quarterly at the IMF's standard interest applying to countries which draw on its Extended Fund Facility. This rate is set by reference to the IMF's basic rate of charge plus surcharges which are based on the size of the borrower's loan relative to its IMF quota. In November 2010, when the terms of the Programme were agreed, the IMF rate was estimated at about 4%. Based on market rates at the time of the agreement, this rate would have been equivalent to about 5.7% if swapped into 7.5 year fixed-rate euro. At current market conditions, the comparable rate would be some 5.75%.

Further drawdowns from the IMF of about €2.1 billion per calendar quarter are scheduled during 2011. Each of these drawdowns will be subject to Ireland's preceding quarterly review by the EU- IMF. The cost of these funds will depend on market conditions when the funds are drawn down. The precise amount to be drawn down will be determined in accordance with requirements. It is expected that there will be a small reduction in the IMF interest rate as a result of the impending change in Ireland's IMF quota when the 2008 reforms to the Fund's Articles of Association are adopted. In broad terms, the amounts drawn down from each of the three external sources are intended to be roughly equal over the course of the year.

With regard to the EFSM, Ireland received the first instalment on January 12th 2011. The nominal amount of the borrowing was €5 billion and this will be due for repayment on 4 December 2015. Ireland pays a yield to redemption of 5.51% on the borrowing reflecting the fact that the bond was issued at a price of €99.594 per €100 nominal. This interest is payable annually on 4 December.

The EFSF is planning its first market issuance, on behalf of Ireland, very shortly which based on the EFSF funding structure is expected to result in a disbursement of approximately €3.5bn from this source. The understanding is that this initial issue will be for a bond with a maturity in mid 2016 but this will depend on market conditions. The borrowing will carry an annual interest payment the exact amount of which will be determined at the time of issue of the bond. Funding from the UK is likely to commence in the third quarter of 2011 and discussions are ongoing as to the drawdown schedule. The rate of interest is expected to be about 5.9 per cent, based on current market conditions.