Tuesday, 28 June 2011
Department of Finance
Bilateral Loan Facilities
The bilateral loan element of the EU –IMF programme of financial support will be provided by three EU Member States – the United Kingdom providing approximately €3.8 billion, Sweden €0.6 billion and Denmark €0.4 billion. All bilateral loans will be provided subject to the conditions of the Memorandum of Understanding agreed with the EU/ECB/IMF. At this point, no funds have yet been drawn down under the bilateral loan facilities with UK, Sweden and Denmark.
The UK facility was signed in December 2010. The interest rate on the amounts drawn down will be based on the Sterling Pound mid-market semi-annual swap rate at the time of drawdown plus a margin of 2.29%. At the time that the UK loan facility agreement was signed the overall interest cost was calculated at about 5.9%, similar to the blended rate calculated by the EU Commission at that time. As with all of the loans, the actual rate will depend on the market rates prevailing at the time of disbursement.
In relation to the Danish and Swedish loan facilities, these have not yet been signed but are near completion. The interest rate on each will be based on the 3-month Euribor interest rate, a market reference rate of good standing, plus a margin yet to be agreed.