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Central Bank sells further €500m tranche of debt linked to AIB

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The Central Bank has sold a further €500 million tranche of debt connected with the collapse of Anglo Irish Bank. The latest transaction brings to €9.5 billion the amount of legacy debt bought from the bank by the National Treasury Management Agency (NTMA).

Following the purchase, €15.53 billion of debt associated with the failure of Anglo Irish Bank remains with the Central Bank.

The NTMA has been moving regularly over recent years to replace the Central Bank-held bonds with money raised from investors in the current low interest-rate environment.

The debt acquired and cancelled yesterday was a floating rate treasury bond that had been due to mature on June 18th, 2047. It brings to €4 billion the amount of Anglo related debt cancelled this year.

Bought and cancelled
A total of more than €25 billion in debt was issued in connection with the Irish Bank Resolution Corporation Act 2013.

To date, the NTMA has bought back and cancelled debt due on dates between 2038 and 2047. A further €2.5 billion of the 2047 debt remains with the Central Bank, along with more than €13 billion of money due to be repaid on dates between 2049 and 2053.

The bank has been selling down its IBRC-connected bond holdings faster than the minimum commitment given to the European Central Bank, which had been concerned at the original debt burden and approach.

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