Dáil Éireann Debate, Thursday - 15 February 2018
119. Deputy Michael McGrath asked the Minister for Finance the NTMA's plans to raise funds from the market for the remainder of 2018, 2019, 2020 and 2021; the detail of the estimated value to be raised in each of these years; the estimated interest on these bonds; and if he will make a statement on the matter. [8048/18]
Amharc ar fhreagraAs the Deputy may be aware, last December the National Treasury Management Agency (NTMA) announced that it planned to issue €14 - €18 billion of Government bonds over the course of 2018.
It has already issued €5.25 billion of benchmark bonds so far this year. This is one third of the mid-way point of the €14 - €18 billion range.
The volume of new bond issuance required in the years 2019 – 2021 will depend on a whole range of factors. These include the Exchequer Borrowing Requirement (EBR), the volume of maturing debt that needs to be refinanced, targeted cash balances and funding from other sources such as short-term paper and State Savings products.
As is customary, the NTMA will, in December of each year, announce its planned bond funding range for the following year.
Owing to the pre-emptive action taken in recent years, the expected volume of new debt issuance required to refinance maturing debt in the coming years is considerably lower than it was three years ago.
The refinancing requirement over the period 2018 – 2020 has effectively been halved.
Through the early repayment of IMF and Swedish and Danish bilateral loans together with the early buyback and switching of near term maturing bonds for longer maturity bonds the 2018 – 2020 refinancing requirement has been reduced by some €16 billion, from €60 billion to €44 billion. Furthermore, reflecting the NTMA strategy of pre-funding, Exchequer cash balances stood at over €17 billion at the end of January.
The interest on the debt to be issued in the coming years cannot be predicted with certainty. However, by lowering our refinancing needs to such an extent, we have effectively taken out insurance and reduced our sensitivity to higher interest rates.
