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e3.1bn Anglo deal 'to happen'

THE Central Bank Governor has given a strong signal that Ireland may be able to dodge the €3.1bn Anglo Irish Bank payment.

Governor Patrick Honohan told an Oireachtas committee that "it now seems likely" that efforts to restructure the payment of promissory notes to the former Anglo will be successful.

Professor Honohan said the Central Bank had been working "vigorously" on the issue with the ECB and other parties ahead of a €3.1bn payment due at the end of this month.

The Central Bank boss has been leading efforts to convince the European Central Bank to let Ireland side-step the payment.

And he believes that a deal is "going to happen" over the coming days. He agreed that interest rates would be in the region of 6.8pc, but said the economic value was much lower because the bond would be passing between State-owned institutions.

"There would be no net cash payment as the money would circle back to the exchequer," he said.

"The net cost would be quite low in terms of the alternatives."