NTMA issues bond at record low yield

The NTMA issued a €1bn 10-year bond at a record low interest rate yesterday as it completed its 2015 pre-funding target.

The issue, which was 2.5 times over-subscribed, dropped to a record low yield of 1.63%. The last bond issue during the summer had a yield of 2.3%.

The NTMA has now done €8bn in pre-funding for 2015.

The Government is close to securing outright agreement on the early repayment of €18.3bn of IMF loans as part of the €67.5bn troika bailout in November 2010.

The German parliament approved the Government’s request on Wednesday night, although German MPs warned that there would have to be some sort of quid pro quo on closing tax loopholes that form part of the Irish corporate tax regime.

The IMF loans had an average interest rate of just under 5%. The troika estimates that if the Government can replace these with bonds issued at current market rates, then it could lead to €2.1bn in savings over the next five years.

Irish sovereign borrowing costs have tumbled since they soared to just over 15% in 2011.

However, Central Bank governor, Patrick Honohan, has said that the Government should focus on paying down debt in next week’s budget if it wants to retain investor confidence.


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