Stephen Donnelly (Wicklow, Independent)
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179. To ask the Minister for Finance if he will confirm that the European Central Bank is seeking to pressurise the National Asset Management Agency into the early redemption of NAMA’s senior bonds, bonds which, according to the NAMA scheme approved by the European Commission in 2010, NAMA is not required to redeem until 2020; and if he will make a statement on the matter. [31061/14]

Stephen Donnelly (Wicklow, Independent)
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180. To ask the Minister for Finance his views that the early redemption of the National Asset Management Agency’s senior bonds ahead of the 2020 deadline, agreed with the European Commission and European Central Bank in 2010, is beneficial for the State; and if the elimination of a contingent liability outweighs the benefit of access to substantial amounts of cheap funding; and if he will make a statement on the matter. [31062/14]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 179 and 180 together.

There is no basis for the Deputy's suggestion that the European Central Bank is putting pressure on NAMA for an early redemption of its senior bonds.

Contrary to what the Deputy suggests, the NAMA scheme as approved by the European Commission in February 2010 did not specify a final date for the redemption of NAMA senior bonds. The NAMA Board in 2012 determined that one of its main objectives would be the redemption of all senior bonds by 2020.

I am advised that the NAMA Chairman has recently stated that NAMA may now be in a position to complete its work sooner than the 2020 date initially envisaged. This is due to the strong performance of the Irish property market over the past year and NAMA's ability, as a result, to increase its Irish sales activity substantially.

Its success in generating cash from asset sales has enabled NAMA to redeem €13 billion of its senior debt to date and it expects to redeem another €2 billion before the end of 2014. This would bring its cumulative redemption to €15 billion which is 50% of the senior bonds that it issued to acquire its loan portfolio. I am advised that this milestone will have been reached two years ahead of schedule.

I welcome the contribution that NAMA's sales and debt redemption activity has made to a significant reduction in the State's contingent liability. The Deputy may be aware that all the major rating agencies now classify the Irish sovereign as investment grade and have factored in NAMA's progress to date and its expected progress. On May 16, 2014, Moody's upgraded the Irish sovereign by two notches from Baa3 to Baa1, citing the accelerated reduction in the State's contingent liability due to the acceleration of NAMA's debt redemptions and the recent successes of the IBRC liquidation.  On June 6, 2014, S&P upgraded the Irish sovereign to A-, specifically recognising the benefits to Ireland's credit worthiness from NAMA's accelerated bond repayments and going further in anticipating that NAMA would increase the pace of bond redemptions in 2014.