NTMA fundraising to fall up to 46% after Covid shock

Reduced borrowing plan for 2022 reflects State’s improving fiscal position

The NTMA plans to reduce borrowing in international bond markets by up to 46 per cent next year

The NTMA plans to reduce borrowing in international bond markets by up to 46 per cent next year

 

The National Treasury Management Agency (NTMA) said on Thursday that it plans to raise €10-€14 billion in international bond markets next year, marking a decline of up to 46 per cent on the amount raised this year as the Government’s Covid-related spending eases.

The agency sold €18.5 billion of bonds this year, on top of €24 billion issued in 2020, as the Government grappled with the costs of funding supports for households and businesses during the worst of the economic shock.

The Department of Finance’s official forecast from October is for the budget deficit to narrow from 5.9 per cent of gross national income this year to 3.4 per cent in 2022. However, economists estimate that the figure for 2021 will be narrower as a result of stronger-than-expected tax receipts in recent months.

Fiscal position

“The reduced borrowing range for 2022 reflects Ireland’s improving fiscal position and our long-standing strategy of pre-funding liabilities,” said Frank O’Connor, the NTMA’s director of funding and debt management.

“With one of the longest [debt] maturity profiles in Europe and lower redemptions over the medium term, we have considerable flexibility in meeting Ireland’s future borrowing requirements.”

The fundraising statement comes as governments globally monitor the spread and potential economic impact of the new Covid variant, Omicron, which has led to a tightening of pandemic restrictions and guidelines internationally in recent weeks.

The NTMA will issue a statement at the beginning of each calendar quarter next year outlining the bond auction plans for that quarter.

It also intends to hold at least one syndicated bond deal, run by a group of investment banks and securities firms, during the year, it said. The agency typically comes out in the early days of January with a multibillion-euro syndicated bond transaction.