Brendan Burgess
Founder
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From the Dail Debate yesterday. I had assumed that I had misheard it.
Am I missing something here?
If AIB has €20 billion of bonds paying 1.5% interest by the Irish Government, surely they will have to be marked down to market value which would be around half of that.
The government is paying 4.5% for its 10 year bonds at the moment. Surely the NAMA bonds will be a debased currency.
Brendan
Deputy Brian Lenihan: The assumption in the Deputy’s question is correct in that taxpayers are not being asked to pay for the NAMA bonds because the Government will issue paper at 1.5% interest - this is the figure we anticipate - which can be presented by the banks on world markets or to the ECB. If the bank holds the bond, the State will have to pay interest at 1.5% which is a much lower rate than applies to our current borrowings.
Am I missing something here?
If AIB has €20 billion of bonds paying 1.5% interest by the Irish Government, surely they will have to be marked down to market value which would be around half of that.
The government is paying 4.5% for its 10 year bonds at the moment. Surely the NAMA bonds will be a debased currency.
Brendan