Wednesday, 13 November 2019

Questions (51)

Barry Cowen


51. Deputy Barry Cowen asked the Minister for Finance if the NTMA will be able to refinance debt in 2020 as planned in the event of a no-deal Brexit; and if he will make a statement on the matter. [39613/19]

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Written answers (Question to Finance)

The NTMA’s bond funding programme for the year is now complete. Over the course of 2019 a total of €14.4bn of benchmark bond funding was raised. This funding was completed at a weighted average yield of 0.9% and a weighted average maturity of over 16 years. A further €0.4bn was issued by way of a new inflation linked bond maturing in 2045 and a 100-year note maturing in 2119. This brings total long-term funding for the year to close to €15bn.

I am informed by the National Treasury Management Agency that it is confident its prudent approach to the Exchequer’s funding requirement means it can meet the Exchequer’s funding needs, irrespective of the risks – such as a no-deal Brexit – that might emerge.

The pre-funding strategy of the NTMA in recent years means the Exchequer is in a strong position ahead of the upcoming debt maturities. The NTMA expects to hold cash balances of approximately €15bn at year-end. This will leave it well positioned to meet medium/long-term debt maturities totalling €19bn in 2020.

There are two benchmark bond maturities in 2020, one in April and the second in October. These bonds have outstanding balances currently of €10.6bn and €6.5bn respectively. In addition there are four £0.4bn tranches of the UK Bilateral loan maturing in 2020. So in total there is approximately €19bn of maturing medium/long-term debt next year.

In terms of contingency planning for Brexit, the NTMA constantly monitors developments in the bond markets. Ireland’s debt dynamics continue to improve and debt servicing costs are declining. The Exchequer’s funding position is strong due to the activities of the NTMA in recent years, and refinancing needs for next year have been significantly reduced through active debt management. The NTMA has completed its bond funding programme for the year and expects the Exchequer to have approximately €15bn in cash balances leaving it well positioned heading into 2020.