Pearse Doherty (Donegal South West, Sinn Fein)
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Question 152: To ask the Minister for Finance if he will provide details of the moneys drawn down to date from the EU/IMF support programme including the amounts drawn down on those dates; the dates on which the draw downs took place; the interest rates payable on those draw downs; and if he will make a statement on the matter. [17466/11]

Pearse Doherty (Donegal South West, Sinn Fein)
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Question 153: To ask the Minister for Finance if he will provide details of the dates on which interest payments on the EU/IMF loans are due; the amount due to be paid on these dates; the interest rate used to calculate these payments for 2011, 2012 and 2013; and if he will make a statement on the matter. [17467/11]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 152 and 153 together.

To date, Ireland's nominal borrowings under the EU/IMF Programme amount to €23 billion. Details of the loans disbursed to date as supplied by the NTMA to my Department are set out in the table. The information includes the dates of draw downs, the amounts, the maturity or term, the equivalent annual interest rates based on the total costs of the loans, the date of the next coupon and the interest due to be paid on those dates. It should be noted that the next coupon date is also the first coupon date in respect of loans from the EFSF and the EFSM. The first coupon date for IMF loans was in April this year.

There have been no draw downs to date from our bilateral loan partners, the UK, Sweden and Denmark. The UK loan agreement has been finalised for some time and it stipulates that 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%.

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.

1. The current SDR floating rate (2.345%) on the IMF drawdown reflects the lower rate arising from a quota increase for Ireland on 4th March 2011. The estimated Euro Equivalent rate on credit outstanding is 4.77% (pricing 31st May 2010) after hedging. The interest rate has been calculated on the basis of the total disbursements to date from the IMF.

2. Estimated figures based on the current SDR interest rate, which is reset weekly.

3. This is the loan amount. The disbursement made available to the Exchequer from the EFSF is €3.592 billion after credit enhancement measures. This credit enhancement is to ensure that the EFSF retains its top AAA credit rating and, thereby, minimizes the cost of funds it borrows. Under the only EFSF loan to Ireland to date, €0.6 billion was retained thereby reducing the cash available to Ireland to €3.592 billion. The retained amount is the present value of the margin of 247 basis points over the life of the loan.

4. 5.22% is the coupon of 2.75% plus the margin of 2.47%. Taking credit enhancements and service fees into account the effective cost to Ireland is 5.90%.

The first coupon date of the EFSM loan drawn down on the 12th January 2011 is 5th December 2011 when €243 million is payable. Thereafter, interest of €272 million is payable on an annual basis (5 December each year) to maturity. With regard to the disbursement of 24 March 2011, the date of the first coupon payment means that the first interest rate period is slightly over a year and the amount reflects this. The annual interest payable on 4 April in 2013 and subsequent years will be €210 million. The same issue arises in respect of the 31 May 2011 disbursement. The annual interest payable on 4 June in 2013 and subsequent years will be €193 million.

The first coupon date of the only EFSF loan drawn down to date occurs on the 18 July 2011. As the first coupon is only in respect of the period from the 1st of February 2011 to 18 July 2011, €53 million of interest is payable. Thereafter interest is calculated on an annual basis. As Ireland has already prepaid the margin of 2.47%, the annual interest payment of €115 million relates only to the EFSF cost of funding, which was 2.75% in respect of this loan tranche. This interest rate is fixed for the lifetime of the loan.

The first coupon date of the only EFSF loan drawn down to date occurs on the 18 July 2011. As the first coupon is only in respect of the period from the 1st of February 2011 to 18 July 2011, €53 million of interest is payable. Thereafter interest is calculated on an annual basis. As Ireland has already prepaid the margin of 2.47%, the annual interest payment of €115 million relates only to the EFSF cost of funding, which was 2.75% in respect of this loan tranche. This interest rate is fixed for the lifetime of the loan.

Interest will be paid quarterly at the IMF's standard interest rate for drawings under 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 loan relative to the country's IMF quota.

-For borrowings up to three times quota the interest rate is the SDR rate (currently 0.58%) plus 1%.

-Borrowings above the threshold of three times quota are charged an additional 2%.

-From 18 January 2014, the third anniversary of the availability of the 1st disbursement of the IMF funds to Ireland, an additional 1% is charged on borrowings over 3 times quota

-In addition to the interest charge there is a once off up front handling fee of 0.5% for all draw downs.

The SDR interest rate is reset weekly and is based on a weighted average of the three-month Eurepo rate, three-month Japanese Treasury Discount bills, three-month UK Treasury bills, and three-month US Treasury bills. The current SDR interest rate is 0.58%.