NTMA reduces debt payments

The NTMA has reduced the lumpy debt repayments falling due in 2016 through a combination of a bond buyback and bond switch with a combined value of €2,036.5m.

Following both transactions, a 2016 4.6% treasury bond with a total value of €10,168.5m has been reduced to €8,132m.

A total of €1,077.5m nominal value of the 2016 bond has been bought back by the NTMA on an outright basis at a price that yields 0.165%.

As part of the swap transaction, the NTMA has bought back €959m nominal value of the 2016 bond at a price that again yields 0.165% and sold €479.5m of the 2023 3.9% bond at a price that yields 2.095%.

The switch was done on a two for one nominal basis. The total outstanding of the 3.9% Treasury 2023 will increase from €5,000m to €5.479.5m.

“Included in the €1,077.5 million nominal of the 4.6% Treasury Bond 2016 bought back on an outright basis was an amount of €800m nominal that the NTMA had acquired as part of its normal operations in the secondary bond market,” said the NTMA in a statement.

NTMA chief executive John Corrigan has signalled on a number of occasions that the agency would seek to smooth the debt profile of sovereign bonds maturing over the rest of the decade.

Since the country exited the EU/IMF bailout last December, sovereign borrowing costs have tumbled to a record low. The NTMA has taken advantage of the benign conditions to pre-fund the State’s borrowing requirements for this year.


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