Ireland close to deal on repaying IMF loans early

Finance Minister Michael Noonan

Ireland moved close to an accord on repaying IMF bailout loans early, with Sweden set to become the last EU nation to agree.

Sweden’s parliament’s finance committee unanimously proposed to allow Ireland to refinance IMF funds without triggering similar payments on its lower-cost European loans.

Sweden is the last EU approval needed, and a vote by parliament is scheduled for next Wednesday .

“This is a positive development in that it removes the final technical hurdle to Ireland repaying its IMF borrowings,” said Philip O’Sullivan, an economist at Investec.

Finance Minister Michael Noonan secured a provisional accord from EU counterparts in September to repay most of the country’s €22.5bn of IMF loans early, pending consent from individual nations. Ireland may save as much as €2.1bn by refinancing most of its IMF loans by selling bonds.

The IMF loans carried an effective 4.99% interest rate at the end of March, 1.9 percentage points more than its most expensive EU funds, according to the Department of Finance.

Enda Kenny said last week that the Government is set to accelerate its plan to refinance IMF loans after it sold €3.75bn of bonds the same day. The NTMA sold the security to yield 2.487%, a “historical low” for a 15-year issuance by the State.

Mr Kenny said the State may repay an initial €10bn of the IMF loans, having first planned a €6bn repayment.


Lifestyle

Vicky McClure sings out about dementia on BBC

More From The Irish Examiner