Stephen Donnelly (Wicklow, Independent)
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Question 50: To ask the Minister for Finance if, in view of the arrangement on the March 2012 promissory note payment, if it is the case that, instead of borrowing the money for this payment from the Troika facility at 3.5%, the Government and State owned corporations will now be borrowing it at 2.35% from Bank of Ireland; if it is the case that Bank of Ireland could buy a comparable bond on the open market at higher rates; if this is the case, the reason Bank of Ireland will buy the bond to cover the promissory note payment; and the economic logic for same. [20772/12]

Michael Noonan (Limerick City, Fine Gael)
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As the deputy is aware on 29th March 2012, I made the following statements on the matter to the Dail: "The €3.06 billion of programme funding that would otherwise have been used to make the promissory note payment should potentially allow greater flexibility around when and at what level Ireland returns to the capital markets."

It is proposed that IBRC will enter into a repurchase agreement with Bank of Ireland at margin of 135bps above the ECB main refinancing rate which is currently 100bps. The troika funds continue to be available to the State at the appropriate funding levels.

The commercial terms and economic logic for proposed repurchase transaction between IBRC and Bank of Ireland is a matter for the board of directors of the respective banks. I note that the matter is subject to Bank of Irelands independent stockholder approval and I refer the deputy to the statement released by Bank of Ireland on the matter on 29 March 2012: "As the transaction is considered to be a related party transaction under the listing rules, it will be subject to independent stockholder approval. A circular containing additional details of the transaction and the date of the proposed extraordinary general court will be posted to stockholders once the circular has been approved by the UK listing authority and Irish Stock Exchange."