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Dublin: 21 °C Tuesday 22 July, 2014

State-owned Permanent TSB pays €1.3bn to bondholders today

The repayment is part of over €17 billion that will be paid to bondholders by Irish banks in 2013.

Image: Sasko Lazarov/Photocall Ireland

PERMANENT TSB, WHICH was bailed-out to the tune of €4 billion by the State, is today paying out €1.3 billion to bondholders.

The payment is for a government guaranteed bond – as opposed to an unguaranteed bond – that was issued on this day in 2010 after the government took control of the bank which was once one of the State’s biggest mortgage lenders.

All senior guaranteed and unguaranteed bonds are being repaid under the government’s current policy in line with the position of the European Central Bank.

The PTSB bond – which is around $1.75 billion – is part of around €17.4 billion that is due to be paid to bondholders this year, followed by €5.9 billion in 2014 and €11.6 billion in 2015 according to a website which tracks the repayments, Bondwatch.

Financial blogger Namawinelake points out that the PTSB bond is not sovereign debt and is being paid by the bank.

However, Permanent is 99.2 per cent owned by the government and has so far cost Irish taxpayers around €4 billion.

The bank said last week that it plans to increase lending fivefold this year from less than €90 million in 2012 to €450 million this year comprising of around €350 million in mortgages, €100 million for personal loans and €5 million in credit card finance.

Ireland has committed a total of €64.1 billion to its banking sector since the original bank guarantee was introduced in 2008 during the global financial crisis.

The government is currently in negotiations to avoid the repayment of a €3.06 billion Anglo Irish Bank promissory note – a form of IOU – at the end of March, discussions which Taoiseach Enda Kenny described as “very complex, highly technical” yesterday.

Last year: In last bondholder payment of 2012, BoI pays out nearly €40 million

Infographic: How much have the Irish put into their banks?

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