The Central Bank has accelerated at the pace at which it has been selling bonds linked to a 2013 refinancing to the State's bailout of defunct lender 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 Government during the financial crisis to rescue Anglo Irish, which was subsequently renamed Irish Bank Resolution Corporation (IBRC).
IBRC had been using the promissory notes as collateral for emergency funding with the Central Bank. When the failed lender was put into liquidation in February 2013, the State replaced those notes with bonds with maturities ranging from 25 years to 40 years.
The Central Bank sold €500 million of the bonds on Tuesday to the National Treasury Management Agency, which immediately cancelled the securities. That brings to €2.5 billion the amount of IBRC-linked bonds that the Central Bank has sold to the NTMA so far this year, compared to €3 billion for the whole of last year and €2 billion for 2015.
All told, some €8 billion of the debt has now been extinguished, well ahead of a timetable agreed at the outset of the deal to ease concerns that the refinancing amounts to monetary financing, which is prohibited in the euro zone.
Tuesday’s transaction was outlined by the NTMA in a statement.
