State paid out €934m to IBRC bondholders on liquidation

The State paid out €934 million to bondholders of Irish Bank Resolution Corporation following its dramatic liquidation in February 2013, according to the latest report from the Comptroller and Auditor General.

The payment was made under the terms of a Government guarantee scheme that existed at the time, with an additional €142 million paid out to IBRC depositors, which comprised the failed Anglo Irish Bank and Irish Nationwide.

The payments were covered by the Credit Institutions (Eligible Liabilities Guarantee) Scheme, which was closed off by the Government on February 26th, 2013. This was just 20 days after IBRC was liquidated.

This scheme was a successor to the original blanket bank guarantee introduced by the Fianna Fáil-led government in September 2008 to rescue the financial sector.

The funds were paid out by the National Treasury Management Agency, which operated the guarantee on behalf of the State. Some €63.9 million was paid to depositors in 2013 and €74.6 million in the following year. All of the funds for bondholders were paid in 2013.

The NTMA has since lodged separate claims with the special liquidators of IBRC – KPMG's Kieran Wallace and Eamonn Richardson – seeking the repayment of the money.

Expenses and interest

It includes €984 million for payments to the bondholders, including expenses and accrued interest up to the end of 2014, and €142 million in relation to the depositors, again including expenses and interest.

In addition, €37.5 million in payments were made in 2013 relating to IBRC’s “deed of guarantee” .

The Department of Finance has lodged a claim with the liquidators for €37.8 million, which includes interest payments of €300 million. To date, none of the claims, which are classed among unsecured creditors, has been satisfied by the liquidators.

In June, Minister for Finance Michael Noonan said the claims ranked behind the payment of costs and expenses of the ongoing liquidation, which would be paid in full, and preferential creditors, including certain taxes and employee and pension claims arising prior to the date of liquidation.