NTMA to to hold bond auctions this month and next

The National Treasury Management Agency is to take advantage of historically low market interest rates to hold bond auctions in mid-April and mid-May. Subject to market conditions, the agency said it would hold auctions on April 14th and May 12th, with details announced on the Monday before each auction.

The auctions mean that the NTMA could reach its minimum target of €6 billion for fund-raising this year by the time of the May auction. It has already raised €4 billion in long-term funding this year through the issue of a new 10-year bond in January and a further auction of this bond in February. The agency also raised €100 million earlier this week through the issue of a new 100-year note.

It has said that it aims to raise a minimum of €6 billion this year and a maximum of €10 billion. Normally at least €1 billion would be raised through a bond auction.

Bond interest rates here have edged lower in recent weeks, in line with trends in other European markets, with no impact from the delay in forming a government or fears about the impact of Brexit. Yesterday 10-year Irish bond yields were trading about 0.72 per cent, close to historic lows.

There has been speculation in the market that low interest rates on very long-term debt might tempt the NTMA to raise more borrowings with a longer maturity, to lock in the benefit of low rates for a prolonged period.

Last year it raised €5 billion in 30-year borrowings. With this 30-year bond now trading below 1.7 per cent, it could test the market temperature to see what interest there would be for an issue of this duration. The agency also announced a treasury bill auction would be held on June 16th.