Stephen Donnelly (Wicklow, Independent)
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123. To ask the Minister for Finance further to Parliamentary Question No. 44 of 4 March 2014, when he stated the cost of capital at the National Asset Management Agency was 2%, if he will confirm the annual cost of NAMA hedging the interest rate on its senior bonds; if he will confirm if this cost is approximately €200 million greater than the actual interest rate attached to NAMA's senior bonds; if he will identify the person providing treasury and hedging advice to NAMA; and if he is concerned by the hedging premium incurred at NAMA; and if he will make a statement on the matter. [28068/14]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by NAMA that its interest expense is detailed in note 6 of its 2013 Annual Report.  It notes that NAMA Group interest on senior debt securities in issue was €126m for the financial year 2013 and that the interest expense on derivatives used to hedge a proportion of the senior bonds in issue was €232m.  NAMA's policy as regards its interest rate exposure is determined by its Board and takes into account a number of factors including the current low cost of hedging its interest rate exposures and its view as to the appropriate level of balance sheet risk. NAMA has entered into interest rate hedging as an insurance mechanism to protect against interest rate increases over its projected lifetime.

NAMA has its own in-house treasury function and it also receives treasury risk management services from the NTMA. NAMA's organisational structure and the activities of each business division are described in NAMA's 2013 Annual Report.