The Central Bank has sold a further €500 million of bonds linked to the restructuring almost a decade ago of the State’s bailout of the now-defunct Anglo Irish Bank and Irish Nationwide Building Society (INBS).
This means the Central Bank has now sold off 94 per cent of about €25 billion of Government bonds it received in February 2013 under a restructuring of so-called promissory notes, which had been used by the State during the financial crisis to rescue Anglo and INBS. It is left with just €1.5 billion of the bonds.
Anglo was renamed Irish Bank Resolution Corporation (IBRC) in 2011 and subsequently took over the remains of INBS.
The Central Bank has sold €23.5 billion of the bonds since 2014, including Tuesday’s transaction, to the National Treasury Management Agency (NTMA), which has immediately cancelled the notes.
The bank has made multibillion-euro profits from the bond sales, as the value of the bonds has surged in the past decade as the Government’s borrowing costs on the financial markets plummeted. Some 80 per cent of the profits have been handed over to the exchequer.
Still, the NTMA has had to raise money to buy the bonds in the long-term bond markets – albeit at much lower interest rates than what were attached to the original bonds.