Written answers
Thursday, 16 July 2015
Department of Finance
EU-IMF Programme of Support
Michael McGrath (Cork South Central, Fianna Fail)
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133. To ask the Minister for Finance the average interest rate applying to each source of funds under the European Union-International Monetary Fund Programme of Assistance for Ireland; and if he will make a statement on the matter. [29726/15]
Michael McGrath (Cork South Central, Fianna Fail)
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153. To ask the Minister for Finance the average maturity of the remaining European Union-International Monetary Fund loans under Ireland’s Programme of Assistance; and if he will make a statement on the matter. [29750/15]
Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 133 and 153 together.
I am advised by the National Treasury Management Agency (NTMA) that the position regarding the EU/IMF Programme loan facilities, including interest rates and maturities, as at end-June 2015, is as set out in the table below.
| Facility | Loan Amount (bn) | € Equivalent (bn)1 | Interest Rate on Loan Amount | Reference Rate Basis | Weighted Average Maturity (Years) |
|---|---|---|---|---|---|
| EFSM | €22.5 | 22.5 | 3.00% | Fixed rate based on EFSM cost of funds2 | 8.63 |
| EFSF | €18.4 | 18.4 | 2.17% | Some fixed but mainly pooled rate based on EFSF cost of funding | 17.64 |
| UK | £3.2 | 3.9 | 2.61%5 | Fixed, based on UK cost of funding | 4.7 |
| Sweden | €0.6 | 0.6 | 1.00%6 | Floating 3-month Euribor plus 1% margin | 5.2 |
| Denmark | €0.4 | 0.4 | 1.01%6 | Floating 3-month Euribor plus 1% margin | 5.1 |
| IMF | SDR3.8 | 4.3 | 1.05% | Floating SDR rate plus 1% margin | 6.5 |
1The € equivalent figures reflect the effect of currency hedging transactions where applicable.
2The 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.
3 As with the EFSF loan maturity extensions agreed in June 2013, EFSM loans are also subject to a seven year extension. It is not expected that Ireland will have to refinance any of its EFSM loans before 2027. However as the revised maturity dates of individual EFSM loans will only be determined as they approach their original maturity dates, the weighted average maturity figure of 8.6 years does not reflect the maturity extensions.
4Reflects maturity extensions agreed in June 2013.
5 Annualised rate.
6 Annualised rates reflecting 3-month Euribor interest rate at time of most recent rate resets.
The Deputy should be aware that the mixture of floating and fixed interest rates across the various EU/IMF Programme facilities makes it difficult to compare one facility directly against another as they contain different interest rate risk profiles, currencies and maturities. In addition, the floating interest rates quoted are at a point in time and are, therefore, subject to change depending on movements in market rates.
The Deputy will see from the table that the interest rate on the outstanding IMF loan balance at end-June 2015 is 1.05 per cent. This comprises the SDR interest rate of 0.05 per cent plus a 1 per cent margin. The more expensive portion of the IMF loan facility has now been fully repaid and so surcharges previously applicable no longer apply.
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