Written answers

Thursday, 18 December 2014

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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107. To ask the Minister for Finance the position regarding plans to repay Ireland’s IMF loans early; and if he will make a statement on the matter. [49273/14]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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In order for the early repayment of a substantial portion of our IMF loans to proceed, it was necessary to secure the agreement of the EU lending facilities, the EFSF,  the EFSM, and the bilateral lenders (the UK, Sweden and Denmark) to waive the mandatory proportionate early repayment clauses in their loan agreements with us. 

Following completion of all necessary approval procedures by our EU and bilateral lenders last month, Ireland is currently proceeding with the first tranche of repayment of our IMF loan of approximately €9 billion.

This represents almost 40% of Ireland's €22.5 billion IMF loan facility.

This transaction reduces the interest bill by about €750 million over the lifetime of those loans.

To facilitate an orderly settlement, the repayment is taking place on two separate dates in December 2014. The first of these repayments was completed on 10 December, and the second one was made yesterday, 17 December.

Total interest savings in excess of €1.5 billion are expected to be achieved from the full early repayment of approximately €18.3 billion to the IMF. The actual interest savings will depend on the timing and market rate paid on bonds issued to refinance the IMF loans once completed.

The December repayment will discharge all scheduled IMF principal repayment obligations that were originally falling due from July 2015 to July 2018. Subsequent early repayments, planned for 2015, will target later repayment dates up to January 2021.

The repayments have been structured to ensure IMF post programme monitoring continues for the initially envisaged period, i.e. up to mid-2021.

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