Michael McGrath (Cork South Central, Fianna Fail)
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To ask the Minister for Finance if he will set out in tabular form the expected impact of the deal on the promissory notes on the projected end of year stock of general Government debt and ratio of general Government debt to GDP in each year from 2013 to 2016; and if he will make a statement on the matter. [7900/13]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware the Irish Government Bonds that have been issued in exchange for the Promissory Notes are floating rate bonds. The coupon on these bonds is 6-month Euribor plus a margin ranging from 2.50% to 2.68%. Information was released by the Department of Finance last week analysing the impact of the transaction on the general government deficit and debt over the period 2013 – 2015. The table sets out general government debt (GGD) forecasts for the three years 2013 – 2015 based upon no policy change.

Three years is the standard forecast horizon used throughout the EU in budgetary publications and covers the medium term budgetary framework. Accordingly, when the Department publishes the Stability Programme Update in April next it will contain an official forecast for the period out to 2016.

Note that the above table showing the GGB and GGD impacts assume that the full portfolio of Government bonds are priced at an interest margin of 270 basis points over 6-month EURIBOR. The Government bond portfolios were ultimately priced at a range of different interest margins over 6-month EURIBOR.

Copies of this material are available on the Department of Finance website under the following links:

http://www.finance.gov.ie/viewdoc.asp?DocID=7543 http://www.finance.gov.ie/viewdoc.asp?DocID=7545

Michael McGrath (Cork South Central, Fianna Fail)
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To ask the Minister for Finance if he will provide details of the transactions costs to be incurred in 2013 in relation to the revised promissory note arrangements; the actions he proposes to mitigate these costs; and if he will make a statement on the matter. [7901/13]

Michael Noonan (Limerick City, Fine Gael)
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The Eligible Liabilities Guarantee (“ELG”) scheme cost is expected to be incurred in 2013. It is estimated that there could be payments under the ELG of c. €0.9 to €1.1 billion. The ELG scheme provides an Irish State guarantee for specific issuances of eligible debt securities by participating institutions and for specific deposits placed with participating institutions. In assessing the impact of this liquidation, it has been assumed that ELG costs of €1.0 billion arise in 2013, i.e., the midpoint of the circa €0.9 billion to €1.1 billion estimated range. There may be a further cost for the Exchequer if it is necessary to make up any difference that might arise between the consideration paid by NAMA for IBRC’s assets and the valuation placed on those assets by the Special Liquidators:

-If the value of the assets sold is not sufficient to compensate NAMA for the bonds it has issued it will be necessary to reimburse NAMA for the shortfall.

-If the value of the assets is greater than the net outstanding borrowings under the Facility Deed, the Special Liquidators will retain the surplus assets for the benefit of unsecured creditors.

Any remaining assets after the unwinding of all secured liabilities will be available for the benefit of the pool of unsecured creditors (including for the Minister for Finance arising from payments made under guarantees, unguaranteed bondholders, suppliers, and sundry liabilities). Whether payments are made to unsecured creditors will depend on the disposal value of IBRC’s assets.