The National Treasury Management Agency (NTMA) borrowed €8.25bn this year by issuing bonds – a type of long-term debt. It had set a target to borrow between €6bn and €10bn in 2025.
In its Annual Funding Plan for 2026, the NTMA said it plans to issue €10bn to €14bn of bonds during the year, including at least one syndicated bond deal.
A strong Exchequer funding position means no issuance of Treasury Bills is planned. This is a type of short-term debt that typically has to be repaid in a matter of months.
The NTMA will issue a statement at the beginning of each calendar quarter outlining its bond auction plans for that quarter.
Dave McEvoy, NTMA Director of Funding and Debt Management, said the target for bond deals next year reflects €15bn in debt maturities in the same period.
A very strong cash balance due to bumper corporation tax in particular, including last year’s Apple tax windfall, means the Government does not need to borrow.
However, the rolling over of bond deals maintains a relationship with lenders and is seen as important to long-term access to the markets.
Borrowing costs for new debt this year are running at more than 3pc – dramatically up from the 2021-2022 era
Ireland is now seen as among Europe’s least risky borrowers – with borrowing costs in line with so-called ‘core’ EU countries.
Even so, borrowing costs for new debt this year are running at more than 3pc – dramatically up from the 2021-2022 era of almost cost-free debt – in line with a global round of interest rate hikes.
While official interest rates have halved back down to 2pc, that’s still a long way above the zero and near-zero levels seen during Covid and for much of the preceding decade.
Long-term bond prices are closely linked to interest rates.
Bonds fell this week after ECB executive board member Isabel Schnabel indicated rates are unlikely to be cut much further, if at all.
She said she was comfortable with investors betting the next interest-rate move will be a hike. Financial market prices suggest investors, in the round, do not expect the ECB to either lower or raise interest rates next year.
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