I am informed by the National Treasury Management Agency that Exchequer debt service costs in the first quarter of 2019 were just over €2 billion, a decline of 6.2% on the same period last year. They were also marginally below expectations.
Exchequer debt service costs peaked in 2014 and have been falling since. The NTMA expects them to fall further this year and next, as high coupon debt matures and is replaced with lower coupon debt.
A fixed rate Treasury bond with a coupon of 4.5% matured in October 2018 while new bond issuance in 2018 was completed at a weighted average yield of just below 1.1%.
Two benchmark bonds mature this year. The first, which matured yesterday on Tuesday, 18 June, had a coupon of 4.4%. The second, which will mature in October, has a coupon of 5.9%. The NTMA advises me that new bond issuance so far in 2019 was completed at a weighted average yield of just under 1.2%.
In the April Stability Programme Update, Exchequer debt servicing costs for 2019 were estimated at just above €5.3 billion. That is close to €0.2 billion lower than was estimated in Budget 2019. Similarly, the debt service estimate for 2020 was reduced by over €0.25 billion.
There are also two benchmark bond maturities in 2020, one in April and the second in October. These bonds have coupons of 4.5% and 5% respectively.