The Minister for Finance, Mr. Michael Noonan T.D. today (6th June 2014) received and published a Progress Update Report on the special liquidation of IBRC from the Special Liquidators, Mr Kieran Wallace and Mr Eamonn Richardson. This report was formally requested by the Minister following discussions with the Department over the past few months and is available on the Department’s website.
Commenting on the publication of the Progress Update Report the Minister stated:
“In the normal course of events the Special Liquidators would report on the second anniversary of their appointment i.e. in February 2015. The concept of a Progress Report was initially suggested by my officials in February and it was decided to publish such a report in conjunction with the completion of the loan sales processes in order to provide a transparent update on the status of the Special Liquidation. Rather than wait for the conclusion of the final elements of the Sand portfolio to be sold, I wrote to the Special Liquidators in May 2014 and asked them to finalise their report as soon as possible for publication. I am referring this report to the Oireachtas Committee on Finance, Public Expenditure and Reform for their consideration.”
The Minister highlighted the direct benefits of the Promissory note transaction stating:
“It is essential to remember that the special liquidation of IBRC was a core element of the promissory note transaction. The benefits of this transaction were multiple and included:
The short term promissory notes are replaced by long term Government Bonds with an average maturity of 34 to 35 years.
A reduction in the State’s General Government deficit of approximately €1 billion (0.6% of GDP) per annum over the coming years, which brings us closer to attaining our 3% deficit target by 2015.
A significant element of the interest payments on the Government bonds, will ultimately be returned to the Exchequer in the form of Central Bank dividends.
The State will be borrowing €20 billion less cash over the next 10 years due to the cash flow benefits.
Anglo Irish Bank and Irish Nationwide are finally consigned to history.
All of these benefits contributed towards Ireland’s exit from the EU – IMF Programme of Assistance and our current record low borrowing costs.
In addition, the now successful outcome of the special liquidation has drawn a line once and for all under the cost to the Irish taxpayer of Anglo Irish Bank. A significant risk to the State and taxpayer has been removed and the benefit of this can be seen in the significant reduction in the States borrowing costs, our 10 year bonds opened at a yield of 2.495% this morning, and has been a contributory factor in Ireland’s sovereign rating upgrades. The success of the liquidation has brought many new investors to Ireland and this has had knock on benefit across the economy.”
Commenting on the Successful liquidation of the IBRC and the unprecedented scale of the liquidation the Minister stated:
“The sheer scale and complexity of the operation to liquidate IBRC which is unprecedented in Ireland, is evident in the report. Over €21.7bn of assets at par value were prepared and brought to the market with over 90% of them sold. The Special Liquidators conducted 52 separate and distinct loans sales processes which consisted of over 15,000 different borrower groups with collateral based in over 22 different jurisdictions. Letters were issued to over 27,000 borrowers and guarantors. The sales process involved liaising with 345 interested parties in over 13 countries with 80,000 documents being reviewed and uploaded to virtual data rooms. The IBRC legal team managed over 1,100 legal cases, over 20 legacy and public interest cases and dealt with over 240 data requests.
So far the Special Liquidators have repaid €10.9bn of the debt owed to NAMA under the €12.9bn Facility Deed from the proceeds of the sale of IBRC’s assets which leaves €2bn remaining to be paid. The Special Liquidators continue to repay the remaining debt owed to NAMA and expect this to be repaid in full by the third quarter this year. The successful sales process to date has ensured that no assets will transfer to NAMA. This has significantly reduced the State’s contingent liability which was recently cited in Moody’s recent upgrade of the Irish sovereign.
The Report gives details on the costs of the liquidation and the loan sales processes to the end of March 2014. The costs should be considered in the context of the alternative arrangement. Had the Bank continued to wind-down its operations until 2020, the costs would have been much greater as they were anticipated to total €1.1bn. The liquidation of IBRC has not only greatly reduced the costs of the wind-down but has also mitigated the risks associated with a long term wind-down.
I would like to commend the Special Liquidators and the staff of IBRC and the other advisers for the hard work that was done over the past 15 months and I would also like to congratulate them on the successful result of their efforts to date.
I gave a clear message to the Special Liquidators that the best outcome must be delivered to creditors, which included the Irish taxpayer, and that the task should be completed within a strict deadline to minimise costs. This has been delivered. I am satisfied with the financial outcome of the liquidation to date which has far exceeded our expectations and has not resulted in any further cost to the Irish taxpayer.”