THE GOVERNMENT plans to raise additional funds next week in the third sale of long-term State bonds this year in a bid to shore up the deficit in the public finances.

The State’s money manager, the National Treasury Management Agency (NTMA), has said it would sell Government bonds maturing in 2011 and 2020, and that the amount to be raised would be announced on Friday morning ahead of the auction next Tuesday.

The NTMA said earlier this month that it planned to raise between €750 million and €1.25 billion at each bond auction.

The agency has said that it expected to hold auctions on the third Tuesday of each month in the second quarter of this year – on April 21st, May 19th and June 16th.

A timetable for bond sales for the third quarter of this year will be announced at the end of June.

The NTMA has raised €10 billion of a record €25 billion that it plans to raise this year to fill the hole in the exchequer’s finances.

Some €6 billion was raised in January through the sale of five-year bonds. A further €4 billion was raised from the sale of three-year State bonds last month.

The NTMA said that the coupon for the 2011 bond would be 4 per cent, while the 2020 bond will have a coupon of 4.5 per cent. The bonds will be the shortest and longest securities on offer to give investors choice, the agency said.

The yield paid to investors – the cost of the borrowing to the State – will be watched as a sign of how risky investors view Ireland’s ability to pay its debts.

The difference in the yield, or spread, between 10-year Irish bonds and the equivalent German bund, the benchmark monitored by investors, moved to its widest level in 10 years earlier this month.

The bond sales will be the last raising of long-term funding before the emergency budget on April 7th.