NTMA sells €1bn of bonds to reach middle of full-year target range

Funding agency given task of gathering funds to repay bailout loans early

Nama was last week given the task of gathering €5.5bn   to repay the State’s remaining 2010 bailout loans from the IMF and  bilateral borrowings  from Denmark and Sweden

Nama was last week given the task of gathering €5.5bn to repay the State’s remaining 2010 bailout loans from the IMF and bilateral borrowings from Denmark and Sweden

 

The National Treasury Management Agency sold €1 billion of bonds on Thursday, bringing the amount of debt raised in capital markets so far this year to €11.1 billion.

That means the State’s debt-management agency has reached the mid-point of the full-year targeted range of €9 billion to €13 billion it had set earlier this year.

The total includes benchmark bond sales as well as €609.5 million raised in April through the NTMA’s sale of its first-ever inflation-linked bond to a group of Irish insurance and pension funds.

The fundraising comes as the NTMA, which had €20 billion of cash and liquid assets at the end of August, was last week given the task by the Government of gathering €5.5 billion to repay the State’s remaining 2010 bailout loans from the International Monetary Fund (IMF) as well as bilateral borrowings received at the same time from Denmark and Sweden.

The early refinancing plan outlined last week is subject to all EU states agreeing to waive the right to two EU bailout facilities, which gave Ireland €40.2 billion during the crisis, to seek early repayment at the same time.

Balanced budget

While Minister for Finance Paschal Donohoe has committed to next year delivering Ireland’s first balanced budget since the economic crash, data issued by the Central Bank on Wednesday showed that the NTMA has to refinance €39.9 billion of government bonds that are due to mature within the next three years.

The bonds sold on Thursday included €550 million of securities that matures in 2026, which were priced to yield investors 0.689 per cent annually. Demand for the bonds outstripped supply by 2.55 times.

The NTMA also sold €450 million of bonds that are due to be repaid in 2037. These were priced to carry a 1.648 per cent yield and the deal was 1.74 times oversubscribed.