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State prepares to borrow €4bn on bond market

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The Government will borrow a much as €4bn on the markets today in a deal that will test investor sentiment towards Ireland as the Covid-19 outbreak rocks the economy.

The National Treasury Management Agency (NTMA) is set to borrow between €3bn-€4bn by issuing seven-year bonds, as early as this morning, according to market sources.

The deal is an early test of sentiment for Irish bonds with the Government potentially needing to spend as much as €25bn in order to combat the effects of the coronavirus on the economy. While the NTMA is sitting on big cash reserves much of that will have to be borrowed.

"The transaction is expected to be launched and priced in the near future subject to market conditions," the NTMA said, without providing any details on size and timing.

Prior to the onset of the pandemic, the NTMA had looked set to raise a total of €10bn-€14bn this year, that is set to rise sharply and bond deals are planned in May and June, as well as this week's expected syndicated issue.

Irish Independent