NTMA carries out two large bond transactions

Ireland’s national debt was reduced by €1.56 billion yesterday following two large bond transactions carried out by the National Treasury Management Agency.

One involved the NTMA buying back €1.0775 billion of a treasury bond that was due for repayment in 2016 and carried a coupon of 4.6 per cent.

Separately, the NTMA completed a switch transaction that involved €959 million in nominal debt for the same 2016 bond being acquired by the agency for a mixture of cash and paper. Half was paid in cash by the NTMA, with the agency satisfying the other half by issuing €479.5 million via a treasury bond due in 2023, priced at 3.9 per cent.

These deals were designed to reduce the so-called funding cliff facing the State in 2016, and smooth out the profile of the country’s liabilities.

After yesterday’s deals the amount due in 2016 has reduced from €10.1685 billion to €8.132 billion. The NTMA is expected to continue to buy back or refinance this debt.