Written answers
Wednesday, 14 January 2015
Department of Finance
IBRC Liquidation
Catherine Murphy (Kildare North, Independent)
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180. To ask the Minister for Finance in view of the proceeds from the sale of the combined portfolio off floating rate notes and fixed rate bonds which had been acquired by the Central Bank of Ireland following the liquidation of IBRC, the amount of these proceeds which were destroyed in 2014; the dates this occurred; the amount of interest which was paid in 2014 on the elements of the bond portfolio; and if he will make a statement on the matter. [1778/15]
Michael Noonan (Limerick City, Fine Gael)
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As part of the liquidation of the Irish Bank Resolution Corporation (IBRC) on 6 February 2013, the Central Bank of Ireland acquired €25.034 billion long-dated Irish Government Floating Rate Notes (FRNs) and €3.461 billion of the Irish Government 2025 Fixed Rate Bond. The table below sets out the various notes, the applicable interest rate, the maturity date for each bond and the nominal amounts originally acquired by the Central Bank. Reported subsequent movements in the Central Bank's holdings are reflected in the notes below.
Full details of the bonds including the offering circulars can be found on the NTMA website at
| Note Type | Rate | Maturity | Nominal |
|---|---|---|---|
| Floating Rate Note | Euribor+268bps | 06/18/53 | 5,034 |
| Floating Rate Note | Euribor+267bps | 06/18/51 | 5,000 |
| Floating Rate Note | Euribor+265bps | 06/18/49 | 3,000 |
| Floating Rate Note | Euribor+262bps | 06/18/47 | 3,000 |
| Floating Rate Note | Euribor+260bps | 06/18/45 | 3,000 |
| Floating Rate Note | Euribor+257bps | 06/18/43 | 2,000 |
| Floating Rate Note | Euribor+253bps | 06/18/41 | 2,000 |
| Floating Rate Note | Euribor+250bps | 06/18/38 | 2,000* |
| Fixed Rate | 5.40% | 03/13/25 | 3,461** |
** By end December 2013 the Central Bank had sold €350 million of the Fixed Rate 5.4% 2025 Irish Government Bond. As of 8 January 2015, the total nominal outstanding of the 5.4% 2025 Irish Government Bond was €11,745m.
In its 2013 Annual Report the Central Bank stated that it intends to sell the combined portfolio of the FRNs and the fixed rate bond as soon as possible, provided conditions of financial stability permit. The Bank stated it will sell a minimum of these securities in accordance with the following schedule: to end 2014 (€0.5 billion), 2015-2018 (€0.5 billion per annum), 2019-2023 (€1 billion per annum), and 2024 on (€2 billion per annum until all bonds are sold). As part of these minimum sales, the Bank sold €350 million of the 5.4% Irish 2025 Government Bond by end December 2013. There were no sales, purchases or transfers of FRNs in the year 2013.
I have been advised by the NTMA that total cash interest payable on the floating rate bonds in 2013 was €638 million and total cash interest payable in 2014 was €755 million. The increase in interest payable in 2014 compared to 2013 largely reflects the fact that a full year's interest was payable in 2014.
As per its 2013 Annual Report the CBI sold €350 million of its holdings of this bond in 2013. However, as the CBI's holdings of this bond during 2014 are not known, it is not possible to state the level of interest the CBI received on its holdings in 2014.
The next Central Bank of Ireland annual report will contain the updated overview of their holdings of these bonds as at YE2014 and is expected to be published in April 2015.
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