There is "limited scope" for additional interest savings on the early repayment of the remaining EU-IMF bailout loans, Minister for Finance Michael Noonan has said.

In reply to a question from Fianna Fáil finance spokesman Michael McGrath, Mr Noonan said Ireland would be subject to a break fee were it to repay some of the other loan facilities early, and these charges could negate any potential savings arising from an early repayment.

Mandatory

In addition, the early repayment of programme loans to the IMF, EFSF, EFSM, UK, Sweden or Denmark would trigger automatic mandatory proportional early repayments to each of the other programme funding partners unless, as was the case with the early IMF repayment, the lenders agreed to waive this clause.

“A condition of this agreement to waive this clause in the case of the early IMF repayment was that Ireland retains a significant element of IMF funding in order to maintain the IMF’s participation in post-programme monitoring for the duration initially envisaged, which is out to 2021,” Mr Noonan said.

He said in 2011 the Government had achieved a reduction in the interest rates on the EU loans, resulting in savings of about €9 billion over the lifetime of the borrowings.

In addition, the repayment of some 81 per cent of IMF loans, completed earlier this year, would generate interest savings of some €1.5 billion, over the life of the loans. The interest rate on the residual IMF loans is just 1.05 per cent.

The Minister also noted that as part of the recent refinancing of a €5 billion EFSM maturity, resulting from extensions granted in mid-2013, the EU raised funding at a weighted average yield of just more than 1.1 per cent and with a weighted average life of about 14 years. By comparison, the yield last week on the 2.4 per cent Government treasury bond maturing in 2030 was 1.8 per cent.