It replaces the original bond funding range, announced in December 2019, of €10 billion to €14 billion.
The revision follows an increase of €14 billion in the Government’s Exchequer Borrowing Requirement due to measures related to the Covid-19 pandemic announced in the Stability Programme Update released today.
The increase in the bond funding range is lower than the increase in the Exchequer Borrowing Requirement due to Ireland’s strong cash position.
The NTMA has already issued over €11 billion of bonds in 2020. This has been achieved through the launch of two new bonds maturing in 2027 and 2035 and an auction of bonds maturing in 2029. There are further bond auctions scheduled for May and June 2020, as per the Issuance Schedule for Q2, 2020.
The NTMA also intends to increase Treasury Bill and Commercial Paper issuance. Overall short-term issuance is expected to increase by a further €5 billion to reach €15 billion by year end.
Frank O’Connor, Director of Funding and Debt Management at the NTMA, said:
“Ireland is well placed to undertake the additional borrowing announced today. We continue to see strong, broad-based demand from investors for Irish sovereign debt, as demonstrated earlier this month with the NTMA’s €6 billion syndication of a new 7-year bond.
We plan to use a combination of both long-term and short-term funding instruments which, alongside active management of our cash balances, will give us flexibility to match our borrowing requirements with investor demand.
Ireland also benefits from strong credit ratings and the average maturity of its debt is one of the longest in Europe. The NTMA has, over recent years, smoothed out the maturity profile of the debt in order to build resilience in the portfolio to address adverse events. Ireland has no bond refinancing requirement in 2021.
These factors, together with the low interest rate environment underpinned by the ECB’s recent actions, are supportive of our planned borrowing activity.”
