NTMA scraps last 2018 bond auction as green deal tops target

The National Treasury Management Agency (NTMA) raised the size of its second sale of bonds to fund "green" projects to €2 billion after drawing orders of in excess of €11 billion from international investors seeking access to the deal.

This brought its total amount of long-term bonds sold this year to €15.4 billion, compared to its full-year target of €14 billion to €18 billion – and allowed it to cancel its last scheduled bond auction of the year, which had been scheduled for November 14th.

The State’s debt management agency had originally targeted raising between €1 billion and €1.5 billion from a green bond sale, sources said on Wednesday after the planned transaction was announced.

The bonds were priced to carry an interest rate – or yield – of 0.229 per cent, the NTMA said on Thursday. That compares to a rate of 1.35 per cent that investors secured as the NTMA sold its first batch of green bonds last October that raised €3 billion. Both sets of bonds mature in 2031.

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“Today builds on the success of our inaugural sovereign green bond issued last year,” said Frank O’Connor, director of funding and debt management at the NTMA. “It allows us to add liquidity to the bond and to continue our programme of diversification that has seen us widen our investor base and increase the range of debt we offer.”

Lead managers

Barclays, Bank of America Merrill Lynch, BNP Paribas, Danske Bank, Davy and JP Morgan were the lead managers of the bond sale.

Green bond funds will be used to finance eligible projects, such as sustainable water and waste management, clean transportation and renewable energy deals, as the National Development Plan targets €23 billion of spending on green energy schemes over the next decade.

Although green bonds make up a fraction of the overall market, global interest has soared as banks, sovereigns and companies look to tap into increasing investor appetite as calls grow for tougher and swifter steps against climate change.