Peak rate of 3% on State bailout loan interest

The highest rate being paid by Ireland on its bailout loans is 3 per cent on loans from the European Financial Stabilisation Mechanism (EFSM), while the lowest rate is paid to Denmark at just more than 1 per cent.

The figures emerged in a written answer from the Minister for Finance Michael Noonan to a question from Fianna Fáil finance spokesman Michael McGrath.

The EFSM lent Ireland €22.5 billion as part of a troika-led financial assistance programme dating to late 2010. The 3 per cent interest cost is a fixed rate based on the EFSM’s cost of funds. The UK is charging 2.6 per cent on the €3.9 billion it provided to Ireland in bilateral funds. Again, this is a fixed rate based on the UK’s cost of funding.

The European Financial Stability Facility is charging 2.21 per cent on the €18.4 billion it is owed, while the interest rate on Sweden’s €600 million in bilateral loans is charged at 1.08 per cent.

The €400 million in Danish funding is charged at 1.07 per cent, while the €10.3 billion that remains of the IMF’s loan to Ireland carries an interest rate of 2.79 per cent.

All these rates and the sums owed reflected the position as of February 10th.

In his reply, the Minister noted Ireland was in the process of repaying the most expensive portion of its €22.5 billion IMF loans and replacing it with less expensive market-based funding.

To date, it has repaid €12.5 billion of IMF loans and expects to repay an additional €5.5 billion by the end of this year.