Central Bank sells off further €500m of Anglo’s legacy debt

The Central Bank has sold another €500 million of the legacy debts of Anglo Irish Bank, bringing total disposals so far to €3 billion.

Some €22 billion in government bonds remain outstanding from the 2013 deal to scrap the Anglo promissory note scheme.

The 2041 floating rate government bonds were acquired yesterday from the Central Bank and cancelled by the National Treasury Management Agency (NTMA).

Following this cancellation the total nominal outstanding for the 2041 bond reduces to €1 billion. The remaining €21 billion in bonds mature between 2043 and 2053.

The effect of the transaction is to substitute government bonds held by the Central Bank with debt the NTMA has raised from investors, the aim being to take the benefit of low borrowing costs on private markets.

The price at which the government bonds changed hands was not disclosed. However, the Central Bank is known to have realised a €180.3 million gain on the sale of €500 million of 2038 notes in 2014. Much of that gain – and the Central Bank’s gain on €2 billion in bond sales last year – goes to the exchequer via dividends from the Central Bank.