Pearse Doherty (Donegal South West, Sinn Fein)
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239. To ask the Minister for Finance following the Econfin statement on 12 April 2013, if he will set out, in tabular form, the old maturity of debt owing to the European contributors to the programme finance bailout together with the applicable interest rates, and the new maturities and new interest rates if different [18761/13]

Michael Noonan (Limerick City, Fine Gael)
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At the Ecofin and Eurogroup meetings in Dublin earlier this month, EU and Euro-area Finance Ministers agreed in principle, subject to national procedures, to lengthen the maturities of the EFSF and EFSM loans to Ireland and Portugal by increasing the weighted average maturity of the loans by 7 years. This is also conditional on continued successful programme implementation being confirmed by the Troika together with the 9th review of the Irish adjustment programme and the 7th review of the Portuguese programme. The 9th review of Ireland’s programme has now completed all approval stages by both the IMF and the EU.

The Ministers also noted that the extension would smooth the debt redemption profile of both countries and lower their refinancing needs in the post-programme period. The detailed implementation of the extension remains to be agreed. The effect of this will depend on the mix of loans extended and the maturities involved. This will be agreed between the NTMA, the EFSF and the EFSM.

Given the above, the table below (the information in which is available on the NTMA’s website) shows only the existing maturity of EFSF and EFSM loans. The bilateral loans are not affected by this agreement.

The interest rates for the EU facilities are already provided at or close to their cost of funds, and these rates are not affected by this decision on maturities.In terms of the EFSF, €6.7 billion of Ireland’s EFSF loans are at fixed interest rates which were based on matched EFSF bond/loan structures. As a result of changes to the EFSF’s structure which removed the direct link between specific bond issues and programme countries, the balance of Ireland’s disbursed EFSF loans, currently €5.5 billion, are part of a pooled system whereby all programme countries pay the same interest rate. The pooled interest rate is calculated daily and is based on the EFSF’s cost of funds in managing the pool. This can be characterised as the weighted average cost of its bond and bill issuance. As at 31 March 2013 the blended interest rate on Ireland’s EFSF loans was 2.66%.

Exceptionally, Ireland has one EFSF loan tranche of €1.27 billion which is considered to be part of the pool but has a fixed interest rate until February 2015, at which point it will roll at the pooled interest rate.

The effective interest rate on Ireland’s EFSM loans is based on the EFSM’s cost of funds when it issues bonds. Such issuance is matched against the loans. Some of its matched issuance can be spread across both Ireland and Portugal. As at 31 March 2013, the blended interest rate on Ireland’s EFSM loans was 3.10%.

As at 31 March 2013, the overall blended interest rate on Ireland’s programme loans was 3.32%.

EFSF/EFSM Liabilities Outstanding at end-March 2013

Liabilities outstanding at end March 2013 on EFSF/EFSM loans

Notes :

Rounding can affect totals.

* Euro equivalents are translated at the reporting date exchange rates, taking account of the effect of currency hedging transactions. The net euro amount received by the Exchequer was €57.3 billion after adjustment for below par issuance, deduction of a prepaid margin (Note 3), and the effect of foreign exchange transactions.

** A prepaid margin of €0.53 billion was deducted from the EFSF loan of €4.19 billion drawdown on 1 February 2011 giving a net liability of €3.66 billion. This margin prepayment will be refunded to Ireland in 2016. The total net liability of €57.44 billion included in the National Debt (€166.17 billion at end March 2013) takes account of this reduction.