NTMA raises €3.5bn from new 10-year bond
January 14, 2022
The National Treasury Management Agency raised 3.5 billion euros from the sale of a new 10-year bond, a lead manager for the deal said, covering at least a quarter of its funding needs for 2022.
The NTMA, like other European debt management offices, regularly raises a chunk of funds early in the year by selling bonds via a syndicate of banks and brokers.
It plans to issue 10 billion to 14 billion euros on the bond market this year, down from the 18.5 billion euros raised in 2021 as the government expects to spend far less battling the Covid-19 pandemic.
Thursday’s sale was priced at a yield of 0.39% and drew strong demand of 27 billion euros, the lead manager said.
The last time Ireland sold new 10-year debt a year ago, it received orders in excess of 40 billion euros for 5.5 billion euros of debt that offered a negative yield.
In June 2020, a 6 billion euro bond sale drew record demand of 66 billion euros.
The country’s public finances started the year on a stronger footing after data last week showed a lower-than-expected budget deficit of around 4% of economic activity in 2021 due to a record surge in tax receipts and less spending by government departments than anticipated.
The government also hopes to soon ease restrictions imposed last month on the hospitality sector to slow the spread of Covid-19.
The NTMA mandated BNP Paribas, Cantor Fitzgerald Ireland, Citi, Danske Bank, JP Morgan and Morgan Stanley as joint lead managers on the deal.
“Today’s transaction demonstrated continued strong demand for Irish sovereign debt from a broad base of investors,” said Frank O’Connor, NTMA Director of Funding and Debt Management.
“The amount issued reflects our lower funding range of €10-14 billion for 2022 – significantly below our borrowing in 2021.
“Ireland’s improving fiscal position and our strategy of pre-funding liabilities has left us with substantial cash balances and considerable flexibility in meeting our funding needs,” he said.