This week the government successfully ended what has been a long process of negotiations with the European Central Bank to restructure our debt repayment arrangement in relation to the Anglo Irish promissory notes (which were issued under the previous government).

It was a significant achievement for the country and a vindication of the strategy being pursued by the government on this issue, as well as the people leading that strategy.

As you will already be aware, the Irish Bank Resolution Corporation (formerly Anglo) has been wound up and special liquidators have been appointed. NAMA, through a special purpose vehicle, will acquire the assets of IBRC. The Central Bank will acquire the promissory notes and swap them for a portfolio of Irish government bonds on superior terms to those of the promissory notes, which will cease to exist.

What are some of the benefits of this?

– Spreading the cost of the prom notes from a weighted average life of circa 7-8 years to    circa 34-35 years, at a lower funding cost for the State, will mean significant annual interest savings;

– There will be a substantial annual cash flow benefit to the State from this arrangement (circa €2.3bn in the first year and €20bn over the next 10;

– A reduction in the underlying deficit of circa €1bn per annum in the coming years (before transaction costs), reducing the forecast deficit by circa 0.6% of GDP annually;

– A reduction in General Government debt over time.

Much coverage and analysis is already in the public domain and will continue over the coming days. However it is always helpful to go to the source where possible to fully understand the arrangements that have been put in place and the new deal that will come in to operation.

To that end you might find the following information from the Department of Finance to be a useful resource:

Transaction Overview

Speech by An Taoiseach announcing the Deal

Minister Noonan on the Irish Bank Resolution Corporation Bill 2013

Q & A on the IBRC Liquidation

Impact Analysis: The impact of the transaction on the State’s public finances

Irish Bank Resolution Corporation Bill 2013