Irish Water to borrow €550m just weeks after Ulster Bank deal
Irish Water will agree loans worth at least €550m from private-sector banks within weeks.
The utility has recently signed a €100m loan agreement with Ulster Bank - the first of a series of loan deals that could finally end Irish Water's dependence on State funding. The troubled utility's €100m commercial loan will be kept off the Government's balance sheet because it is not guaranteed.
While the Ulster Bank loan is unsecured, Irish Water plans to refinance the loan with longer-term revolving credit from a syndicate before the end of the year.
The utility then intends to borrow on the bond markets.
In November last, Irish Water agreed a €50m overdraft facility with Bank of Ireland that was also not covered by a Government guarantee.
Sources said credit approval has now been secured for another €250m from domestic and international commercial banks.
The utility is also understood to be in advanced discussions with two other international commercial banks for a further €200m of bilateral loans.
The banks involved in the talks include AIB, Barclays, BNP Paribas, BOI, Danske, HSBC, Ulster, Royal Bank of Scotland and Royal Bank of Canada.
An Irish Water spokesperson confirmed some aspects of the deal with Ulster Bank but would not comment on the interest rate the utility is paying.
Informed market sources said that the company is likely to have secured financing at very competitive rates of less than 1.75pc.
Irish Water's model sees all short-term bilateral facilities rolled into a long-term syndicated loan by the end of the year.
The utility expects the next loan will be on a three to five year basis once Irish Water begins domestic billing.
Sunday Indo Business