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 Post subject: Re: Repaying Ahead of Schedule: Ireland & IMF Loans
PostPosted: Fri Sep 12, 2014 2:46 pm 
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bml wrote:
This reason there doing it is because it will save 400m annually on intrest payments. The authors 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.

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 Post subject: Re: Repaying Ahead of Schedule: Ireland & IMF Loans
PostPosted: Fri Sep 12, 2014 2:52 pm 
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Mantissa wrote:
bml wrote:
This reason there doing it is because it will save 400m annually on intrest payments. The authors 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.


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 Post subject: Re: Repaying Ahead of Schedule: Ireland & IMF Loans
PostPosted: Fri Sep 12, 2014 3:00 pm 
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bml wrote:
Mantissa wrote:
bml wrote:
This reason there doing it is because it will save 400m annually on intrest payments. The authors 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.

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 Post subject: Re: Repaying Ahead of Schedule: Ireland & IMF Loans
PostPosted: Fri Sep 12, 2014 3:17 pm 
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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.


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 Post subject: Re: Repaying Ahead of Schedule: Ireland & IMF Loans
PostPosted: Fri Sep 12, 2014 3:23 pm 
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Will definitely save a lot of money. But might not be quite what Noonan is claiming now.

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 Post subject: Re: Repaying Ahead of Schedule: Ireland & IMF Loans
PostPosted: Thu Sep 18, 2014 2:12 pm 
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Major Budget boost as IMF backs €300m loan bill deal

http://www.independent.ie/business/budg ... 83794.html


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