NTMA will auction 750 million euros in short-term debt this week

The National Treasury Management Agency is due to auction 750 million euros worth of Irish six-month Treasury bills on Thursday.

The invoices will be due on October 24, with payment falling on Monday April 25.

The competitive auction is restricted to Recognized Primary Dealers and Eligible Counterparties, and will be followed by a non-competitive auction immediately thereafter.

The latest treasury bill auction ended on March 24, with the NTMA selling its target amount of €750m of five-month bills at a yield of -0.565pc.

The total of the offers received amounted to 1.5 billion euros, ie double the amount proposed.

Ireland plans to raise a total of €10 billion to €14 billion in 2022, according to NTMA chief Frank O’Connor, well below the country’s borrowing in 2021.

Ireland managed to raise much of its 2022 market funding needs in January when the NTMA took in €3.5 billion from the syndicated sale of a benchmark 10-year bond.

The funds were raised at a yield of 0.387pc, more than half a percentage point higher than the corresponding syndicated deal last year, which posted a negative yield of -0.257pc.

The deal, which will likely be the biggest issue of the year after NTMA raised 18.5 billion euros in 2021 to support pandemic-related spending, could meet almost a third of the needs of state fundraising for the new year – just as the rate environment looks set to change.

The European Central Bank has left open the possibility of raising interest rates as of the summer.

The ECB is Ireland’s biggest creditor, according to the Department of Finance, buying up €25.5bn worth of Irish government bonds under its various asset purchase programs at the end of of the month of March.

Last month, the ECB ended its €1.8 billion pandemic emergency purchase program and will end a parallel asset purchase program in the third quarter of this year.

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