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NTMA borrows €1.25bn at so called negative interest rate

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NTMA Offices Dublin

NTMA Offices Dublin

NTMA Offices Dublin

The Government has again borrowed money on the markets at a so called negative interest rates, meaning investors will accept a small loss over nine years in exchange for parking cash in what’s seen as a safe investment overall.

However, the level of investor interest is well down on recent deals. The National Treasury Management Agency (NTMA) borrowed €1.25bn on Thursday in two bond deals.

The interest on €1bn of bonds due to be repaid in 2031 is 1.35pc but the bonds were issued at a premium that means in effect the State is borrowing at less than a zero costs in real terms.

Borrowing costs are higher on a separate €250m of bonds due to be repaid in 2050, with the yield to investors at 0.52pc.

The latest bonds means the NTMA has borrowed €21.25bn so far this year, well above pre-Covid expectations, in order to plug the widening gap between government spending and the amount of tax raised.

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