NTMA raises €600m in short-term treasury bills

THE National Treasury Management Agency (NTMA) has topped up the country’s funding reserves, raising a further €600 million in short-term debt and avoiding the higher borrowing costs currently linked with longer-term bonds, in the process.

The latest borrowing round was carried out via the sale of treasury bills (otherwise known as T-Bills), which are usually repaid over months rather than years; as is the case with the Government bonds the NTMA has been selling since the start of the year, and through which it has already raised virtually all of Ireland’s funding requirements for this year and part of next.

Yesterday’s auction (the next T-Bill auction is on September 9) included bills of six and eight months maturity – and was six times oversubscribed. The cost of borrowing was lower on this auction, mainly due to the shorter-term bills, with an average yield – basically the interest rate demanded by investors – amounting to 1.98% on the six month bills and 2.35% on the eight month bills.