Sunday 20 October 2019

Massive demand for €2bn of 'green' borrowing

NTMA boss Conor O’Kelly
NTMA boss Conor O’Kelly

Shawn Pogatchnik

THE Government has borrowed €2bn by issuing Green Bonds that finance the State's environmental projects.

The National Treasury Management Agency (NTMA) auction attracted more than €11bn in bids. This allowed the agency to exceed its planned €1bn to €1.5bn target and to cancel next month's planned final auction of the year.

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Successful bidders received 12-year debt securities offering an annualised 0.229pc yield.

That represents a low borrowing cost for the State, but a better return for bondholders than are provided by most Government bonds, where yields are negative.

The latest borrowing is a 'tap', or add-on, to the €3bn Green Bond issued a year ago, the first of its kind for the NTMA led by Conor O'Kelly.

The NTMA said yesterday's more than 130 bidders included 24pc from the Nordics, 19pc from the UK, 14pc from Germany and Austria, and 11pc from France. The winning bidders comprised asset managers (43pc), banks (24pc), hedge funds (14pc) pension funds and insurers (12pc) and central banks (6pc).

Green Bonds are earmarked to finance the State's low-carbon goals within the National Development Plan.

It has a target of spending €23bn by 2027 on water and waste management, clean transportation, sustainable management of living natural resources and land use, renewable and more efficient energy generation, and climate change adaptation projects including flood relief.

The NTMA said yesterday's auction brought its 2019 borrowing total to €15.4m, satisfactorily within its €14m-€18m target range.

Irish Independent

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