The National Treasury Management Agency (NTMA) will look to have around €10bn in cash set aside by the end of this year, to meet bills falling due in early 2016.
The NTMA had a cash balance of €11bn coming into the new year, which will be used to meet outflows of around €6.6bn due in the first part of the year – including a €4.4bn shortfall in Exchequer funding and around €2bn of bond debt that falls due.
The agency, which is responsible for borrowing on the markets and managing the national debt, plans to borrow €12bn to €15bn on the markets this year.
Some of the cash raised will be used to repay more expensive IMF loans early.
Officials may look to push out Ireland’s debt maturity profile by tapping the markets for longer term debt towards the end of next year.
The cost of borrowing for the Government is currently running at an all-time low. That reflects both the favourable attitude of investors towards Ireland but also those same investors’ belief that growth, and therefore investment returns, across the euro area will stay weak well into the future.
Bond auctions where a share of that debt will be raised have been scheduled for Thursday, February 12, and Thursday, March 12.
Very short term debt will be borrowed on January 29 and March 19.
Last week the Government borrowed €4bn from the bond markets at the lowest price in the history of the State.
NTMA director of funding and debt management Frank O’Connor said he has open mind to offering holders of debt due to be repaid in April 2016, the new longer term bonds.
Large amounts of government debt fall due to be repaid in 2018, 2019 and 2020, and pushing out those maturities is likely to be a priority for the NTMA.
Meanwhile, Bank of Ireland is set to borrow on the markets through a mortgage-backed covered bond that will qualify for ECB’s bond-buying programme.
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