Central Bank sells further €500m of Anglo Irish-linked bonds

The Central Bank has sold a further €500 million of bonds that were linked to the restructuring four years ago of the bailout of now-defunct Anglo Irish Bank.

The Central Bank received €25 billion of government bonds in February 2013 under a complex restructuring of promissory notes used by the State during the financial crisis to rescue the bank, which was subsequently named Irish Bank Resolution Corporation (IBRC).

IBRC had been using the promissory notes as collateral for emergency funding at the Central Bank. When the failed commercial property lender was put into liquidation four years ago, the government replaced these notes with bonds.

Floating rate bonds

The National Treasury Management Agency said in a statement on Thursday it acquired the €500 million of floating rate bonds sold by the Central Bank and subsequently cancelled them. The NTMA has acquired and cancelled a total of €6 billion of the Anglo Irish-linked bonds, leaving the Central Bank well ahead of the disposal schedule agreed at the outset of the refinancing.

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To appease the European Central Bank and avoid the 2013 arrangement amounting to monetary financing of the Government, which is prohibited by EU laws, the Central Bank agreed to sell off at least €2.5 billion of the notes by the end of 2018.