National Treasury Management Agency moves closer to its €10bn target for 2024

The Government's debt issuing office, has reached the halfway point with €5bn benchmark bonds.

Minister for Finance Michael McGrath (right) and Frank O'Connor chief executive of the NTMA which raised €600m by issuing a 10-year bond and a further €400m from a 17-year bond. File picture: Fennell Photography

The National Treasury Management Agency (NTMA), the Government's debt issuing office, raised €1bn at a bond auction on Thursday as it moves closer to its target for the year.

The NTMA has plans to raise a maximum of €10bn, or a minimum of €6bn, on international markets by the end of 2024. Following the latest auction, it has reached the halfway point for its €10bn target with €5bn benchmark bonds.

The agency raised €600m by issuing a 10-year bond that matures in October 2034 at a yield of almost 2.9%, and a further €400m from a 17-year bond that matures in April 2041, at a rate of 3%.

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 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.

Meanwhile, last month the NTMA announced it will divest from Ireland Strategic Investment Fund (ISIF) investments in six Israeli companies that are linked to operations in the the Occupied Palestinian Territory.

The NTMA controls and manages the ISIF on behalf of the State.