SBA government loans are to be scrapped and replaced with bonds that will be issued through the government’s sovereign credit agency.

The move will see the sale of a record €8bn of bonds that would be issued by the agency as part of a €2.5bn package that is due to be unveiled on Wednesday.

Sebastian Saab, the former finance minister who led the country into the euro crisis, said the deal was a “bombshell” for the Government of Ireland.

Saying it was the most significant step the Government had taken since taking office in December, he added: “We have got a government that is not taking any risks.”

However, some analysts said that would mean the country would miss out on some of its potential economic gains in the coming years.

Mr Saab said the announcement was not in the best interests of the Government.

“This is a very good move by the Government and it’s not a big step forward,” he said.

“It’s going to cost a lot of money but we’ve got to get it right.”

I think it’s the right move but it will not be in the interest of the Irish people.

“The new bonds are to replace a “core” portfolio of bonds which is the majority of the €1.2tn that has been issued by SBA since 2011.

The Government has been considering the possibility of selling the bonds in a deal that would see the government buy the bonds, or buy the assets.

However, the Government has indicated it will only consider a deal in which it sells the bonds.

The plan was rejected by the SBA board in December.

The new Government also wants to use its “own capital” to pay off its outstanding debt.

The State owns almost 90 per cent of SBA, which manages more than €6.7bn in debt and is the countrys third-largest debt provider.

The government said the new debt would be paid back in three instalments over 10 years, starting in 2018, and would be backed by the proceeds from the sale.

It is understood the government will now decide how much of the bonds to sell to fund its debt repayments, which could include some of the debt held by SBC.

The bonds will also include a 3.8 per cent interest rate on all outstanding loans, which will have to be repaid.

The bond sale is likely to be the first step in the Government’s attempts to shore up its finances ahead of the introduction on Tuesday of the new sovereign debt rules, which the Government is already facing a host of challenges.

The legislation would mean that Ireland will not need to borrow any money to pay back its debts, as it would already have enough cash to cover all outstanding bills.

The deal is also expected to see the Government get the go-ahead to spend €4bn on a new Irish Air service to be run from Cork and Shannon airports.

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