16. National Loans Advance Interest Account

National Debt of Ireland

The Agency can cancel or issue amounts of existing Irish Government Bonds. These transactions are effected by means of sales or purchases undertaken by the Post Office Savings Bank Fund (“POSBF”). The POSBF then settles with the Exchequer. The settlement amount for each bond transaction includes the accrued interest at that point in the coupon period. The interest paid is deposited in the National Loans Advance Interest Account until the full interest is due on the coupon date. On the coupon date, the interest is then used to offset the related servicing costs of the Exchequer.

A full interest coupon is payable to the registered owner where a bond is held on an ex-dividend date. The purpose of this account is for the POSBF to compensate the Exchequer for the unearned element of the interest arising on tranching bonds cum-dividend or on cancelling bonds ex-dividend.

Account of Receipts and Payments 2015
€'000
2014
€'000
Balance at 1 January 48,810 5,344
Accrued Interest Received on National Loans - Tranches and Auctions 30,369 46,913
Accrued Interest Paid on National Loans (55,055) (3,447)
Balance at 31 December - Cash with Central Bank of Ireland 24,124 48,810

< PREVIOUS NOTE

NEXT NOTE >