NTMA plans to raise up to €1.5bn in debt auction

The National Treasury Management Agency will auction up to €1.5 billion in long-term debt last this week as part of its ongoing programme to meet the costs of the Covid crisis.

The Government’s debt management agency said on Monday that it will offer investors two bonds in an auction on Thursday – the 1.1 per cent Treasury Bond due to be repaid in 2029 and the 1.5 per cent Treasury Bond 2050.

The agency hopes to raise between €1 billion and €1.5 billion in the auction.

The NTMA announced last month that it would raise more than previously planned this year in response to the Covid crisis. It now plans to raise between €20 billion and €24 billion in the long-term bond markets in 2020, up from an original plan, announced in December, to sell €10 billion to €14 billion of securities.

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It also expects to increase its amount of short-term borrowings by €5 billion to €15 billion this year.

The NTMA has already issued over €11 billion of bonds this year. It raised €6 billion last month alone – its largest bond sale in over a decade.

That figure was well in excess of the €3 billion-€4billion of debt planned for the April auction with the agency moving to take advantage of strong demand after €33 billion in bids emerged for the seven-year debt on offer.

The State’s debt management agency also spent over €11 billion in April in its biggest bond redemption since before the last financial crisis in a transaction that cut hundreds of million of euro off its annual interest bill.

The Government expects to run a budget deficit of 7.5 per cent of gross domestic product (GDP), or €23 billion, this year as it ramps up spending to meet the cost of tackling the spread of coronavirus and the resultant economic shutdown.