In order to enable Ireland to successfully exit the EU/IMF programme, the NTMA's working plan through 2012 has been to begin to return to the markets on a phased basis, mainly through shorter-term issuance, while also taking advantage of any opportunities to issue longer-term debt. The EU/IMF programme provides funding to the end of 2013. As at the end of 2011 the Irish State was faced with €11.9 billion of bonds maturing in January 2014, commonly referred to as the funding cliff.
Addressing this funding cliff has been a priority for the NTMA. The transactions to which the Deputy refers are among a number of successful capital market operations the NTMA has taken in this regard during the course of the year so far. In total these long-term capital markets operations have effectively reduced the 2014 funding cliff from €11.9 billion to €2.4 billion. This has removed a major obstacle to full market re-entry and should, in tandem with continued progress on other fronts, help us achieve lower yields.
Proceeds of debt issuance are used to fund the ongoing operations of the State and the balances are held in the Exchequer account at the Central Bank where they earn the Euro Overnight Index Average as set by the European Banking Federation on a daily basis.
