Written answers
Thursday, 19 January 2012
Department of Finance
EU-IMF Programme
4:00 pm
Michael McGrath (Cork South Central, Fianna Fail)
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Question 80: To ask the Minister for Finance when the reduction in the interest rate being charged to Ireland from funds paid out of the EFSF and EFSM took effect; and if he will provide a complete schedule of the current interest rates being charged to Ireland on all sources of funding under the EU-IMF programme of assistance, including bilateral loans. [3220/12]
Michael Noonan (Limerick City, Fine Gael)
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The Euro Area Heads of State or Government (HOSG) agreed on 21 July 2011 to reduce the cost of the European Financial Stability Facility (EFSF) to lending rates equivalent to those of the Balance of Payments facility close to, without going below, the EFSF funding cost. In addition, further amendments to the EFSF framework have removed the interest rate margin on EFSF funds and were incorporated into a new legal agreement on the 27th of October in which the interest rate margin is now defined as zero. The agreement incorporates a guarantee commitment fee of 0.1% per annum and a service fee to cover the cost of operations of the EFSF. The NTMA has estimated that the overall net reduction in Ireland's EFSF interest rate margin and other changes will be in the range of 2.7% to 2.8%. It should be noted that the EFSF's cost of funds depends on the interest rate it pays for its market issuance when raising funds for programme countries.
In October, the EU Council of Ministers approved an EU Commission proposal to eliminate the margin of 2.925% on the EFSM facility. This change was incorporated into an amendment to the existing legal agreement on 28th of October and the margin is now defined as zero. This will apply to EFSM borrowings back to the date upon which they were issued. The actual cost of funding depends on the prevailing market rates at the time of each drawdown.
In relation to the schedule of the current interest rate being charged to Ireland on all forms of funding under the EU/IMF Programme of financial support, the following table supplied by the NTMA, provides the information for all amounts drawn down up to 16 January 2012
| Drawdown Date | Maturity Date | Interest Rate | Currency | Principal | |
| EFSF | 01/02/2011 | 18/07/2016 | 2.75% | EUR | 4,193,835,977 |
| EFSF | 14/11/2011 | 04/02/2022 | 3.60% | EUR | 3,000,000,000 |
| EFSF | 15/12/2011 | 15/03/2012 | 0.32% | EUR | 985,950,000 |
| EFSF | 12/01/2012 | 04/02/2015 | 1.73% | EUR | 1,270,000,000 |
| Total EFSF | 9,449,785,977 | ||||
| EFSM | 12/01/2011 | 04/12/2015 | 2.50% | EUR | 5,000,000,000.00 |
| EFSM | 24/03/2011 | 04/04/2018 | 3.25% | EUR | 3,400,000,000.00 |
| EFSM | 31/05/2011 | 04/06/2021 | 3.50% | EUR | 3,000,000,000.00 |
| EFSM | 29/09/2011 | 04/09/2026 | 3.00% | EUR | 2,000,000,000.00 |
| EFSM | 06/10/2011 | 04/10/2018 | 2.38% | EUR | 500,000,000.00 |
| EFSM | 16/01/2012 | 04/04/2042 | 3.75% | EUR | 1,500,000,000 |
| Total EFSM | 15,400,000,000.00 | ||||
| IMF | 18/01/2011 | 18/01/2021 | Floating SDR + Surcharges | XDR | 5,012,425,200.00 |
| IMF | 18/05/2011 | 18/05/2021 | Floating SDR + Surcharges | XDR | 1,410,000,000.00 |
| IMF | 07/09/2011 | 07/09/2021 | Floating SDR + Surcharges | XDR | 1,319,000,000.00 |
| IMF | 16/12/2011 | 16/12/2021 | Floating SDR + Surcharges | XDR | 3,309,000,000.00 |
| Total IMF1 | 11,050,425,200.00 | ||||
| UK Bilateral | 14/10/2011 | 15/04/2019 | 4.72% | GBP | 403,370,000.00 |
| Total UK Bilateral | 403,370,000.00 | ||||
Note 1: The interest rate on IMF loans is variable. It is composed of a weekly setting of the IMF SDR interest rate and surcharges which are volume and time dependent. As of 19 January 2011 the SDR interest rate accruing on Ireland's IMF loans is 0.10% and the surcharges are 2.32% making a total of 2.42%.
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