Sunday 18 March 2018

Irish Housing Agency won't seek funds despite ECB's green light

ECB Headquarters
ECB Headquarters
Colm Kelpie

Colm Kelpie

AN Irish agency deemed eligible to benefit from the European Central Bank (ECB) bond-buying programme has no plans to return to the market to raise funds, its chief executive has told the Irish Independent.

The Housing Finance Agency (HFA), set up to provide loans to city and county councils and the housing sector, has been added to the list of Eurozone agency issuers whose paper is eligible for purchase under the ECB's public sector purchase programme (PSPP).

Being on the list means an agency's bonds can be bought by the ECB under its quantitative-easing programme, established last year to boost the moribund Eurozone economy and revive inflation.

But HFA chief executive Barry O'Leary said he wasn't aware of any request by Irish authorities to have his agency added to the list. Nor does the agency have any plan to return to the markets, he added.

"We have no plans to go back into that market at the moment," Mr O'Leary said.

A spokesman for the European Central Bank told the Irish Independent that country-specific agencies would have been recommended for addition to the PSPP list by the relevant national central bank.

But a spokeswoman for the Central Bank of Ireland said it had made no such request. She said the list was compiled and updated by the ECB using the eligible assets database.

"The Housing Finance Agency has one bond listed on that. The ECB wanted to compile a comprehensive list of potential agencies that might be used into the future, but there's no detriment to them being on the list," she said. "The bond that they (HFA) have has a maturity now of less than two years. They can be added to the list as a potential agency that could be used in the future."

The agency said it has a loan book of around €3.7bn and a lending capacity of up to €10bn as it sources funds from the National Treasury Management Agency (NTMA), and has a loan from the European Investment Bank and the Council of Europe Development Bank.

The agency has recently signed a facility with the latter which gives it access to long-term, fixed rate money, at 1.5pc for 25 years, allowing it to provide money to city and county councils and at attractive rates.

"At the moment between those sources and what we can get from the NTMA, we don't have any plans to go back into the market to issue our own paper," Mr O'Leary said.

"We used to issue paper prior to the crash, but since the crash the NTMA do all the borrowing in the market, and I don't see that changing in the short term."

He said funding was not a problem. "We're not short," he said.

Owen Callan, an analyst with Cantor Fitzgerald, who flagged the addition of the agency to the ECB list, had speculated that it signalled the Government and NTMA were looking at market financing options in the future for the Housing Finance Agency.

The ECB is buying €80bn worth of assets, mostly government debt, per month, at least until March of next year.

Irish Independent

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