State to raise €750m in short-term debt this week

Previous similar auction from NTMA had a negative yield for investors

Treasury bills form a small part of the State’s borrowing programme

Treasury bills form a small part of the State’s borrowing programme

 

The State’s debt management agency will auction €750 million of short-term debt on Thursday. The National Treasury Management Agency (NTMA) will auction the debt, known as treasury bills, which will mature on December 14th of this year.

Treasury bills form a small part of the State’s borrowing programme. The NTMA has said it will issue between €20 billion and €24 billion of debt this year, but the treasury bills are not included in those figures which relate to longer-term debt. The bills offer investors an alternative product to longer-term debt which can take years to mature.

A treasury bill auction took place in May and saw record demand. The bills were priced to yield investors minus 0.43 per cent, meaning investors will get paid less than they lend to the State.

Last week the Republic also attracted record high demand for a 10-year bond issue that raised €6 billion.

The move raised 50 per cent more than market sources had suggested the State’s agency would be looking to generate.

The issue drew €66 billion of demand, twice the previous record for an Irish sovereign bond. The funds were raised at a yield of 0.285 per cent, and the order book included about 400 separate interested parties.