Government looking at legislation over refinancing of debt

The Government is thought to be considering legislation to make it easier for businesses that owe money to banks exiting the Republic to refinance those debts with domestic institutions.

The news comes as Danske Bank prepares to sell up to 4,000 small- and medium-sized enterprise (SME) loans to international private equity funds.

Reports yesterday indicated the Government is considering a guarantee offer that will aid businesses in this and similar situations to find alternative takers for their loans.

They suggested that under its terms, in the case of a default, the Government would step and pay a portion of the debt once the loan’s collateral had been realised.

Responding to the reports, the Department of Jobs, Enterprise and Innovation said a review of the credit guarantee scheme has been done and improvements to the model have been identified and delivered through changes to legislation.

“The Government is always looking to assist and support SME lending,” the department added.

It is likely any such scheme would have to remain within EU state aid rules and get the European Commission’s approval.