Irish State raises €1bn in cheapest cost in its history, in silver lining to Covid-19 crisis

Lenders across the world gave the Irish State €1bn in free money on Thursday morning and will effectively pay more again for the security of keeping it safe, as global markets tumbled amid the coronavirus crisis.

It came as the National Treasury Management Agency -- the States’’ debt office -- sold €1bn of debt payable in 2029 at a negative interest rate of around 0.15%.

That marked the cheapest borrowing in the history of the State.

The auction came ahead of an ECB meeting that disappointed markets.

Yields on many government bonds across the eurozone pay negative interest rates as investors pull money from stock markets and buy government bonds amid fears over the economic fallout of Covid-19.

For the State, it is a silver lining in an otherwise bleak short-term outlook as the virus puts jobs in the tourism, retail and hospitality industries at risk.

"It is extraordinary," said Richard Flood at Brewin Dolphin Ireland.

Investors were paying the State to borrow their money and "the key reason anyone would want to do do this is that they are looking for safety", he said.