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Dáil Éireann Debate, Thursday - 16 July 2020

Thursday, 16 July 2020

Ceisteanna (30)

Cormac Devlin

Ceist:

30. Deputy Cormac Devlin asked the Minister for Finance if measures are being taken to refinance the outstanding obligations into long-term debt of the State in view of the historically low borrowing costs; and if he will make a statement on the matter. [16279/20]

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Freagraí scríofa

The National Treasury Management Agency (NTMA) has taken advantage of the favourable funding and interest rate environment of recent years to lengthen the maturity of the National Debt and lock-in the benefit of low interest rates.

Since the turn of 2015, the NTMA has issued over €90 billion of medium- to long-term debt. This was issued in the form of standard benchmark bonds, green bonds, inflation-linked bonds and ultra long-term (circa 50–100 year) private placements. This funding of over €90 billion had an average maturity of more than 14 years and an average rate of less than 1%. It included two new 30-year bonds, a new 20-year bond and two new 15-year bonds.

Debt refinancing “chimneys” over the four year period 2017–2020 that had, at one point, stood at some €70 billion have effectively been eliminated. By contrast, the refinancing requirement over the next four years 2021–2024 is far lower, at just over €27 billion.

Over €23bn of EU-IMF Programme debt in the form of loans from the IMF and the Danish and Swedish bilateral loans was repaid in full and ahead of schedule.

Large cash balances – presently around the €30 billion mark – have been built up and these can be used to part-fund the deficit and repay maturing debt.

Furthermore, the purchase of €17 billion of Floating Rate Notes from the Central Bank of Ireland since late 2014 and their replacement with medium- to long-term fixed rate bonds protects the State against future interest rate rises. This is ahead of the minimum schedule; a strategy driven by the low interest rate environment of recent years.

Questions Nos. 31 and 32 answered with Question No. 25.
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