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In the Year’s First Bond Offering, NTMA Raises €3 Billion

The State has raised €3bn on financial markets at a comparatively modest interest rate, amid robust demand from overseas investors.

The amount represents one-third to half of the annual borrowing objective that the National Treasury Management Agency (NTMA) had previously stated was between €6 billion and €10 billion.

The money was raised through a syndicated 10-year bond sale, the first the NTMA, which oversees the nation’s debt, had issued in the previous two years. Auctions take place on the public market, while syndications are customized for certain purchasers. On March 21, the NTMA plans to conduct its inaugural bond sale.

At a yield, or interest rate, of 2.651 percent, the bond was priced below what the government would have received last year and in close proximity to the German benchmark rate.

Investor demand for the bond was significant, with a total order book in excess of €44bn, which included more than 300 individual accounts, the NTMA said.

The NTMA’s director of fundraising and debt management, Dave McEvoy, called the start of the year encouraging. “The amount issued, at €3 billion, represents our relatively low borrowing requirement this year,” the speaker stated. “Our funding position is good due to the low amount of maturing debt and our healthy cash holdings. For the balance of the year, we have a great deal of leeway in satisfying the Exchequer’s financing requirements.

At the lower end of its funding range, the NTMA only provided €7 billion last year due to record budget surpluses and booming tax receipts.

A general budget surplus of just under €8 billion was recorded by the government in 2023, and another surplus is anticipated in 2024.

The low interest rate on the transaction, according to Davy stockbrokers analyst Diarmaid Sheridan, is indicative of the state of the governmental finances. Regarding the debt issuance they hope to accomplish for the year, he remarked, “It’s a good start.” It places them in a very stable position. The NTMA is able to continue to benefit from the solid financial condition.

“Our budgetary situation differs significantly from that of the majority of the eurozone. Many of the nations in the eurozone still have deficits.

The NTMA has been issuing bonds since 2022 with an average interest rate of 2.13 percent and a weighted average duration of 16.4 years, which is among the oldest in Europe. It stated last year that it will only be doing one 2024 syndicated bond offering.

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