Interest and Fees
Interest and Fees
User Guide
This dashboard provides details on historical payment flows (interest, fees, and principal) between the EFSF/ESM and programme countries (left-hand scale). The blended lending rate for each country is displayed as a line (right-hand scale).
The chart shows the amount of payment flows for a particular programme, filterable by selected time frequency (monthly, quarterly, or annually), and the payment type for one or more types of flows. Hovering over the bars in the chart displays the amount of a given payment flow for that period, while hovering over the line displays the value of the blended interest rate for the selected period.
For the Greek EFSF programme, where interest was partially deferred starting in 2013, the deferred interest amounts can also be displayed (when selected in ‘Payment type’). For Portugal and Ireland, the prepaid margin can be selected. Payment flows are published monthly with a six-month publication delay.
Interest and Fees Dashboard
Context Information
The EFSF/ESM passes on to programme countries its costs of funding the loans, i.e. its cost of borrowing money from financial markets by issuing bonds and bills. This cost is expressed as the base rate and is calculated daily.
Apart from the base rate, there are other components that make up the total cost of a loan: a service fee , margin, commitment fee and guarantee commission fee (only for EFSF). The base rate is the largest component of the total interest paid by programme countries.
Updated information on ESM/EFSF lending rates is available on the Lending Rates page of the ESM website.
Glossary
Blended lending rate
The overall cost of lending to a programme country. It is calculated as a weighted average interest rate including the lending costs of all the loans expressed in one single rate. The rate covers the cost of funding for pool-funded cash disbursements, back-to-back funding rates, cashless disbursements, and the fees and margins charged for the assistance under each loan.
Prepaid margin
The margin amounts that were paid in advance on early EFSF loans granted to Ireland and Portugal; those amounts were deducted from the loan disbursement amount. Parts of the prepaid margin were reimbursed by the EFSF to Ireland and Portugal in 2016, as the margin had been set to zero for these loans.
Base rate
The ESM/EFSF funding cost to which the margin and other pricing elements are then added. For disbursements made in cash, the funds raised by the ESM and EFSF are typically assigned to a long-term pool and a short-term pool, from which disbursements are made and a certain liquidity buffer is maintained (see diversified funding strategy). The calculation of the interest amount accrued for each of the pools is done on a daily basis.
Service fee
The Service Fee represents the source of general revenues and resources to cover ESM/EFSF operational costs and has two components: - up-front service fee: up-front payment is applied at the time of a disbursement and paid generally via a deduction on the drawn amount or may be invoiced separately to the beneficiary ESM Member. At the time of each disbursement, an up-front service fee of 50 bps over the disbursed amount is charged. - annual service fee: annual payment applied over the outstanding principal amounts. It is paid on the interest payment date or invoiced separately. An annual service fee of 0.5 bps per annum payable in arrears from the first anniversary of the signature of the facility.
Margin
For ESM loans, the margin accrues annually on outstanding amounts and differs across the financial support instruments to reflect varying risk profiles of each lending instrument. The EFSF initially applied certain levels of margin for its loans, and a system of reductions of prepaid margin. Since 2011, the margin has been set to zero for financial assistance provided to Greece, Ireland and Portugal, other than a 200bps margin which applies to a specific tranche of financial assistance provided to Greece, and which can be reduced to zero as part of the debt relief measures for Greece agreed in 2018.
Commitment fee
A fee charged to recover various costs incurred by the ESM and EFSF as part of its funding and liquidity management, in particular the negative carry. Negative carry is the negative difference between the interest rate at which the ESM and EFSF raise funds and the return obtained from investing those funds in high-quality assets as a liquidity buffer.
Guarantee commission fee (only EFSF)
The guarantee commission fee is set at 10 basis points per year and is related to the guarantees provided by the euro area Member States for funding instruments issued by the EFSF. The Eurogroup decided in late 2012 to cancel Greece's initial guarantee commission fee.