Free State debt jumps 39% in last twelve months

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Colm Kelpie – 12 August 2013

 

IRELAND’s long-term government debt increased to €115.6bn in June – up 39pc on the same month last year.

 

The hike reflects the liquidation of the former Anglo Irish Bank earlier in the year, as the controversial promissory note was scrapped and replaced by a series of longer-term government bonds.

 

A by-product of the deal also meant that Irish resident investors increased their share of long term debt.

 

At the end of June, Irish resident investors held 45pc of long term Irish government bonds compared with 27pc in June last year, according to data from the Central Bank.

 

The state’s debt management body, the National Treasury Management Agency, also raised €500m in June through an auction of short-term government debt known as Treasury Bills.

 

About €21.4bn of euro-denominated long term debt falls due for repayment over the next three years - €13.2bn of which will be paid out to non-resident investors.

 

The Dail passed legislation to liquidate the Irish Bank Resolution Corporation (IBRC) during a hasty late-night session in early February under a plan to deal with the massive annual repayments due under the controversial promissory-note deal.

 

With IBRC in liquidation, the Central Bank became the economic owner of the promissory notes.

They were replaced by the Government with a series of longer-term, floating-rate bonds to the value of €25bn and with maturities of up to 40 years.

 

At the end of June, the outstanding amount of debt issued by Irish financial and non-financial firms and by Government was €905.7bn, a drop of almost 3pc since June of last year.

 

http://www.independent.ie/business/irelands-government-debt-jumps-39pc-in-twelve-months-29491850.html