NAMA due to be repaid today under last March’s promissory note arrangement

Fianna Fáil Finance spokesperson Michael McGrath has called for the Minister for Finance to clarify the current position in relation to the €3.06bn loan provided by NAMA to IBRC following the issuing of a government bond in lieu of last March’s promissory note payment.

Deputy McGrath stated, “On March 29th last, Minister Noonan informed the Dáil that instead of making a payment of €3.06 billion to IBRC, the Government would instead issue a long term government bond. The plan was that Bank of Ireland would accept the bond, pay IBRC the €3.06 billion who would in turn repay the Irish Central Bank. However, since the approval of Bank of Ireland shareholders was required, the Minister ordered NAMA to pay the €3.06 billion to IBRC as an interim arrangement. NAMA duly did this on 3rd April 2012.

“The Minister subsequently clarified that the current maturity date of the facility with NAMA is 30th May 2012, with an absolute maximum maturity of 90 days as set in the Ministerial direction. In other words, under the facility put in place, NAMA is due to be repaid €3.06 billion from the IBRC today unless the Minister intervenes and extends the time.

“At the time of the announcement, Minister Noonan portrayed it as a significant breakthrough which would be a pre-cursor to an overall re-structuring of the promissory note arrangement. Yet two months on, we have received no update from the Minister on the overall deal on bank debt. I am calling on the Minister to urgently clarify the following today:

  • Is the Minister planning to give IBRC further time to repay NAMA the €3.06 billion?
  • Has IBRC used the money loaned to it by NAMA to repay its emergency loans from the Irish Central Bank?
  • When will Bank of Ireland hold an EGM to give approval to the loan it is due to make to IBRC under the terms of the deal he outlined?
  • What progress has been made with the Troika on concluding an overall deal on reducing the bank debt?
  • Does he intend to publish the technical paper being concluded with the Troika on the promissory note structure, if so what timetable is envisaged?

“There is a widespread agreement that Ireland needs a reduction in the costs of re-structuring the banks. Since the announcement last March, it would appear that the Government have lost any sense of urgency on the matter.”