Business Irish

Sunday 17 November 2019

NTMA cancels €500m IBRC-linked bonds, saving on interest payments

Patrick Honohan
Patrick Honohan

Colm Kelpie

The National Treasury Management Agency has cancelled €500m worth of bonds linked to the liquidation of the former Anglo Irish Bank after buying them from the Central Bank.

As part of the liquidation of the Irish Bank Resolution Corporation (IBRC) in February 2013, the Central Bank acquired €25.03bn of long-dated so-called Floating Rate Notes (FRNs), and €3.461bn of the Irish Government 2025 Fixed Rate Bond, which was due to mature in March of 2025.

The NTMA announced that it had cancelled €500m of the Irish Floating Rate Treasury Bond due to mature on 18 June 2038.

“The bonds ... were purchased today from the Central Bank of Ireland,” the NTMA said. “Following this cancellation the total nominal outstanding for this bond will decline to €500m.”

It is the second time this year that the NTMA has taken such a decision - the move is essentially a cash management exercise for the NTMA.

The state’s debt management agency also cancelled €500m worth of the IBRC-linked bonds in late June.

In May, the Central Bank revealed that during the course of last year, the assets held by the Central Bank and linked to the liquidation had dropped to €25.8bn, made up of €24.5bn worth of FRNs, €900bn of the Fixed Rate Bond and about €400m worth of Nama bonds. Central Bank governor Patrick Honohan said at the time that all of the IBRC-related Nama bonds have been redeemed, and that all of the fixed rate bonds had also been sold.




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