Repaying Ahead of Schedule: Ireland & IMF Loans - -> trueeconomics.blogspot.co.uk/201 … edule.html
This is exactly how I see it
And the IMF seemed to actually want them to deliver on targets, whereas the EU/ECB didn’t seem as “hardcore”
Date and numbers here:
I’ve no idea how the early repayment would be distributed amongst the various components.
Any idea how much this would actually save per annum on interest payments
It’s unfortunate that the public are not aware as to how incredulous the IMF were at the government’s decision not to burn the bondholders.
When such a basic move is avoided, you know that’s where the real VI’s lie.
€375 million, or two Irish Waters, is the figure being quoted, every year
i guess the game changer debt deal that they still deny will never happen is still happening…
How kind of our masters to let us save money on the bank interest on a 60B debt we should never have taken on in the 1st place.
This reason the government is doing it is because it will save 400m annually on intrest payments. The rte.ie/news/business/2014/09 … st-budget/ view about political motivations is speculative.
It will save 400m if Ireland can actually refinance these loans for a lower interest rate. That is not certain, although it is likely. It’s possible that the bond market may take a longer look at Ireland’s longterm prospects if we try and refinance this much.
The current interest rate on a 10 year bond is 2%, they believe they can raise 18bn at roughly this rate by the end of the year and have the IMF paid back. This would reduce Ireland debt burden so bond markets might see Ireland bonds as even less riskier.
Yeah but the risk is moving from IMF/ECB/EC (who Ireland kinda has to pay back) to private bondholders (who could get burned in Bailout II). Of course, the ECB may be de facto underwriting this bond issue also through ESM. But we end up paying a bit more than expected for the 18bn.
Just checked it, 10 year bond rate is at 1.75%. Paying IMF 5% on the 18bn. So unless the rate rises very sharply before the end of the year then they should do it.
Will definitely save a lot of money. But might not be quite what Noonan is claiming now.