Republic gets new deal on Anglo debt
A deal to avoid the repayment of €3.1bn (£2.4bn) in Anglo debt due at the end of the month has been agreed between the Irish government and the European Central Bank.
The agreement was confirmed yesterday by the Republic's Finance Minister Michael Noonan who has headed up negotiations on the debt since last September.
The €3.1bn (£2.4bn) Anglo promissory note, or IOU, has been replaced by a government bond not due for repayment until 2025, taking some pressure off the coalition as it gives it more breathing space in its management of the stretched public finances and banking debt.
It will also be a boost for the Government ahead of the weekend's Fine Gael Ard Fheis amidst the ongoing controversy over the €100 (£83) household charge.
As part of the deal, the Anglo - now IBRC - debt will technically be repaid and there will be no default.
"Put simply, €3.06bn (in cash) will be settled by delivery to IBRC of a long-term government bond with an equivalent fair value," Minister Noonan said.
"Ultimately, it is intended that this long term government bond will be financed for one year, on commercial terms, with Bank of Ireland who may in turn refinance the bond with the ECB."
Negotiations will continue in a bid to get the green light for the extension of the repayment time on Anglo's overall promissory note debt of over €30bn (£24bn).