(Corrects day in first paragraph)
LONDON, Feb 7 (Reuters) - Ireland’s Prime Minister Enda Kenny on Thursday said his country had taken “an historic step on the road to economic recovery” by striking a deal with the European Central Bank to ease the burden of debts it took on to rescue Anglo Irish Bank.
Following are the key points of the deal that have been announced so far:
* Anglo Irish Bank, more recently known as IBRC, is being liquidated.
* Most of the Central Bank of Ireland’s 40 billion euro exposure to the former Anglo Irish Bank will be repaid with a sovereign bond from the government that replaces the 25 billion euro ‘promissory note’ the Central Bank had been holding as collateral against the borrowings.
* The Central Bank’s claim is also offset by a 3.1 billion euro 2025 bond that IBRC received in lieu of a cash payment for a promissory note repayment that fell due in March 2012.
* The remainder of the Central Bank’s exposure to IBRC will be largely covered by special bonds issued by Ireland’s bad bank Nama, which has until mid-2013 to either sell IBRC’s remaining assets to private buyers or hand them over to Nama.
* The annual cost of paying off Anglo’s bailout will fall by “approximately 1 billion euro ... over the coming years”, Kenny said in his announcement to the parliament.
* This suggests payments will be about 2 billion euros a year, compared with the current 3.1 billion. Kenny said this would ease Ireland’s budgetary pressures.
* Payments on Anglo’s bailout are being stretched out over 40 years - 22 years longer than under the old plan. The average maturity of the promissory note was less than 8 years, while the average maturity of the new bonds is more than 34 years.
* The new government bonds being issued are made up of three tranches of 2 billion euros maturing after 25, 28 and 30 years, three of 3 billion euros maturing after 32, 34 and 36 years and two of 5 billion euros maturing after 38 and 40 years.
* The payments on the debt move to an interest-only system, and the outstanding principal on the new government bonds will only be repaid when they reach maturity.
* If Ireland sticks to its spending plans, the deal is forecast to bring the country’s budget deficit down to 4.5 percent in 2014 from an earlier projection of 5.1 percent, and to 2.4 percent from 2.9 percent in 2015, a presentation from the Department of Finance showed.
* The Central Bank has agreed to sell off a minimum amount of bonds every year, described by the head of Ireland’s department of finance John Moran as a “very light disposition” in its early stages.
* The minimum sales are: 500 million euros worth to be sold by the end of 2014, at least 500 million euros a year from 2015 to 2018, at least 1 billion euros a year will be sold from 2019 to 2023, and after 2024 at least 2 billion a year will be sold.
* Sales of the bonds must be done in a way that is “not disruptive to financial stability”, Moran said. (Reporting By Laura Noonan; Editing by Hugh Lawson)