NTMA plans to raise €1bn in bond auction

The auction is due to be held on Thursday as market bets increase that the ECB will cut rates at least once before August

The auction is an opportunity for domestic and international investors to buy Irish sovereign debt paper because the healthy public finances.  Picture: Leah Farrell / RollingNews.ie

The National Treasury Management Agency (NTMA), the Government's debt issuing office, has announced that it plans to raise €1bn in a bond auction scheduled for later this week.

This is the first auction organised by the NTMA since March, as bets increase that the European Central Bank (ECB) will start cutting interest rates in June.

The details of the bond auction are yet to be released, but the agency said in a statement on Tuesday that on Thursday, it plans to auction a 10-year bond that matures in 2034 and a 17-year bond that matures in 2041.

The auction is an opportunity for domestic and international investors to buy Irish sovereign debt paper because the healthy public finances, thanks to the huge amounts of tax revenues flowing into the exchequer, do not require the NTMA to tap government debt markets either frequently or for any significant amounts of debt.

Investors are also effectively rolling the dice that eurozone inflation will be tamed for the next 10 and 30 years, a further signal that official ECB interest rates will be lowered before too long.

The NTMA aims to sell up to €10bn worth of debt over 2024.

The auction this week will be confined to recognised primary dealers, said the NTMA.