The National Treasury Management Agency (NTMA) has successfully attracted over €36 billion in orders from global investors for its latest bond issuance, which totaled €3 billion. This significant interest comes as markets adapt to Ireland’s updated government program, signaling confidence in the contry’s financial stability.
The bonds, set to mature in 2054, were issued with a yield of 3.154%, reflecting steady demand for long-term Irish government debt. Dave McEvoy, director of funding and debt management at the NTMA, emphasized the strong investor appetite, stating, “Today’s 30-year bond transaction demonstrates continuing strong investor appetite for Irish Government bonds.”
McEvoy added, “Owing to the exchequer’s healthy cash and liquid asset balances, and the projected exchequer surplus, we expect to have a relatively limited borrowing requirement this year. The €3 billion raised today represents almost 40 per cent of the midpoint of our 2025 bond funding range, leaving us well positioned to meet the exchequer’s funding needs over the remainder of the year.”
The irish government recently reported a robust exchequer surplus of €12.8 billion for 2024, bolstered by record tax revenues of €108 billion. A significant portion of this surplus stems from a €11 billion payment from Apple, following a ruling by the Court of Justice of the European Union (CJEU) in September 2023.the tech giant was ordered to settle back taxes and interest owed to Ireland, with a total of €14 billion expected to transfer.
In addition to the exchequer surplus, the Department of Finance estimates a broader general government surplus of €23.7 billion for the previous year. This trend is expected to continue in 2024, with a projected surplus of €9.7 billion. Though,the NTMA anticipates a reduction in its €34 billion cash balance this year,as outlined in its latest financial presentation.
The government’s newly agreed program, finalized by Fianna Fáil, Fine Gael, and the Regional Independent Group, outlines aspiring plans for the nation. Key commitments include the construction of 300,000 new homes by 2030, expanded childcare support, and a renewed focus on tourism. This program also introduces a new national housing strategy, replacing the previous Housing for all initiative.
Simultaneously occurring, Ireland’s benchmark 10-year bond yields have risen to approximately 2.81%,up from 2.34% just over a month ago.This aligns with broader global trends in sovereign debt markets, driven by economic uncertainty and shifting U.S. policies under President Donald Trump. Despite these fluctuations, major central banks, including the European Central Bank (ECB) and the U.S.Federal Reserve, have begun easing interest rates as inflationary pressures subside.
Looking ahead, the NTMA faces significant debt redemptions in 2025 and 2026, with €14 billion in existing government bonds and EU bailout-era loans due for repayment. These challenges underscore the importance of maintaining investor confidence and strategic financial planning.
As Ireland continues to navigate its fiscal landscape, the strong demand for its bonds reflects a vote of confidence from international markets. With a solid financial foundation and ambitious government plans, the country is well-positioned to meet its economic goals in the years to come.
How does the updated goverment program,wiht its focus on prudent fiscal policies and lasting growth,influence investor sentiment towards Irish government bonds?
Interview with Dave McEvoy,Director of Funding and Debt Management at the National Treasury Management Agency (NTMA)
Archyde News: Thank you for joining us today,Mr.McEvoy. the NTMA recently announced the successful issuance of €3 billion in bonds maturing in 2054, with an overwhelming €36 billion in orders.What does this level of investor interest signify for Ireland’s financial standing?
dave McEvoy: Thank you for having me. The scale of interest we’ve seen—€36 billion in orders for a €3 billion issuance—is a clear signal of global confidence in Ireland’s economic stability and fiscal management. Investors are looking for safe, long-term assets, and the demand for our 30-year bonds reflects thier trust in Ireland’s ability to meet its financial obligations over the coming decades.
archyde News: The bond issuance comes at a time when markets are adapting to Ireland’s updated government program. How do you think this policy framework influenced investor sentiment?
Dave McEvoy: The updated government program has been well-received internationally, as it underscores Ireland’s commitment to prudent fiscal policies and sustainable growth. Investors are especially reassured by the clarity and stability it provides. This, combined with Ireland’s strong economic performance and robust public finances, has made our bonds an attractive option for long-term investors seeking predictable returns.
Archyde News: the bonds were issued with a yield of 3.154%. How does this compare to previous issuances, and what does it tell us about investor appetite for Irish debt?
Dave McEvoy: The yield of 3.154% is competitive and aligns well with market expectations. It reflects the steady demand for Irish government debt, particularly for longer maturities. Compared to previous issuances, this yield is a testament to Ireland’s improved creditworthiness and the broader market’s confidence in our ability to deliver stable returns over the long term.
Archyde News: What role does the NTMA play in ensuring such successful bond issuances, and what strategies did you employ for this latest offering?
Dave McEvoy: The NTMA’s role is to manage Ireland’s debt in a cost-effective manner while maintaining investor confidence. for this issuance, we focused on clear dialog, ensuring transparency about Ireland’s economic outlook and fiscal policies. We also timed the issuance strategically, taking advantage of favorable market conditions and strong investor appetite for long-term securities. Our global outreach and relationships with key investors were also critical in attracting such significant interest.
Archyde News: Looking ahead, how does this successful bond issuance position Ireland for future borrowing needs?
Dave McEvoy: This issuance strengthens ireland’s position in the international bond markets and provides us with greater flexibility for future borrowing.The strong demand demonstrates that Ireland is a reliable issuer of debt, which will help us secure favorable terms in the future. It also reduces our refinancing risks, as we’ve locked in long-term funding at a competitive rate.
Archyde News: what message would you like to convey to global investors considering Irish government bonds?
Dave McEvoy: I’d like to emphasize that ireland remains a stable and attractive destination for investment. our strong economic fundamentals, prudent fiscal policies, and transparent governance make Irish government bonds a secure and rewarding choice.We value the trust placed in us by global investors and are committed to maintaining the high standards that underpin that trust.
Archyde News: Thank you, Mr. mcevoy, for your insights. We wish the NTMA continued success in its endeavors.
Dave McEvoy: Thank you. It’s been a pleasure.
