Ireland’s bailout partners have developed “a lot of consensus” on tackling the country’s rescue cost for the former Anglo Irish Bank Corp (ANGL)., an International Monetary Fund official said.
“It is still a work in progress,” Craig Beaumont, the IMF’s mission chief for Ireland, said on a conference call with reporters today. “But fundamentally the underlying concept has attracted a lot of consensus.”
Ireland’s government is seeking to restructure about 30 billion euros ($39.6 billion) of so-called promissory notes, or IOUs, used to rescue Anglo Irish, which was renamed Irish Bank Resolution Corp. The nation stepped out of bond markets and sought an international rescue in November 2010, amid concern that the nation’s banking woes would push it into bankruptcy.
Beaumont said an accord on the notes would “reinforce” Ireland’s debt sustainability. Ireland may struggle to regain “sufficient” access to market funding in 2013, the IMF said in a report today. He said the risks to market re-entry next year “are a little on the high side” and he’d like to reduce them.
“Sovereign spreads have declined recently, but prospects for regaining sufficient access to market funding in 2013 remain uncertain,” the IMF said in the report released today in Washington. “The program assumes modest market access later in 2012 and more substantial market funding in 2013.”
Irish Finance Minister Michael Noonan has said re- engineering Anglo Irish Bank Corp.’s promissory notes over 30 years at “more favorable rates” would lead to a “serious reduction” in the country’s debt burden.
Ireland has committed to repaying 3 billion euros a year for at least a decade to pay off the cost of Anglo Irish, which almost collapsed under the weight of souring real-estate loans before being nationalized.
Ireland’s October 2020 bonds, regarded as the benchmark, yielded 6.99 percent today, down from 9.1 percent at the start of December. The yield on the equivalent Greek security is 33 percent and on the Portuguese note it’s 13.5 percent.
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