NTMA to beat minimum funding target before UK election vote

State agency plans to sell €1 billion of bonds through two auctions on Thursday

National Treasury Management Agency chief executive Conor O’Kelly. Photograph: Nick Bradshaw.

National Treasury Management Agency chief executive Conor O’Kelly. Photograph: Nick Bradshaw.

 

The National Treasury Management Agency plans to sell €1 billion of bonds on Thursday, surpassing its minimum full-year funding target on the day of the UK election, as polls indicate the gap is narrowing between the two main parties.

The NTMA, which manages the State’s debt issuance, said it plans to auction bonds due in 2026 and 2045 in the forthcoming auction.

The agency has already sold almost €8.35 billion of bonds so far in 2017 of a full-year targeted range of between €9 billion and €13 billion, leaving it well positioned ahead of potential market volatility following the UK vote.

The debt sale is also occurring against the backdrop of the State seeking to sell a 25 per cent stake in AIB in the coming weeks in order to recover up to €3 billion of the bank’s €20.8 billion bailout bill.

The bank has already paid back €3.3 billion of capital, but when interest, levies, dividends and guarantee fees are included, total payments are in the region of €6.8 billion.

While the Government is on track to have a balanced budget next year for the first time since the beginning of the crisis, the NTMA will remain very active in the bond markets over the coming years as it seeks to refinance debt as it falls due.

Some €29.2 billion of bonds must be redeemed within the next three years, with more than €7 billion falling due next year.

Dealers said that the NTMA’s fundraising activities in the early part of this year will cushion it in the event of potential market volatility as a result of the UK election and as Brexit talks begin in the coming months.

A Survation poll for Good Morning Britain, published on Tuesday, indicated that support for the ruling Conservative Party was just one percentage point ahead of the Labour Party. The Conservatives had a 17-point lead with the pollster at the start of May.