Fire sale of IBRC loans not an option, says Michael Noonan

Minister for Finance Michael Noonan has said there will be no "fire sale" of loans as part of the liquidation of Irish Bank Resolution Corporation and that Ireland is on track to successfully exit the EU-IMF bailout at the end of 2013.

In an interview published in the May edition of Accounting and Business Ireland , a magazine published by accountancy body ACCA Ireland, Mr Noonan said: "There is no question of a fire sale of IBRC assets. The legislation ensures that the taxpayer is protected and will receive the maximum value for the assets in IBRC."

He said the liquidators would undertake a valuation process on the IBRC loan book and that those who satisfy the minimum valuation “may bid for the assets in a sales process”.

The remaining loans will be transferred to the National Asset Management Agency in "repayment of IBRC's debt to Nama".

Mr Noonan said the recent deal with the European Central Bank on IBRC’s €3 billion a year promissory note would reduce the State’s general government deficit by about €1 billion or 0.6 per cent of GDP per annum. “[This] will bring us €1 billion closer to attaining our 3 per cent deficit target by 2015,” he added.

Debt burden
Mr Noonan was asked if this was fair to effectively place this debt burden on future generations. "The reality is that, in 25 to 40 years, even on very conservative growth assumptions, this debt will be a fraction of its present size relative to the economy," he said.

Mr Noonan said Ireland’s prospects of exiting the bailout were enhanced by the National Treasury Management Agency’s €5 billion, 10-year bond raising on March 13th at a yield of 4.15 per cent.

On mortgage arrears, he said “all the tools” were now in place for lenders to work through their arrears.