NTMA announces 'buyback' of bond due to mature next month
THE Government has announced plans to repay €6.85bn of bond debt a month early.
The move will mean the national debt is lower at the end of the year, but will reduce the €20bn or so “backstop” of cash held by the National Treasury Management Agency (NTMA).
The bonds falling due in January will be paid back early through a so called “buy back.” The NTMA is offering to redeem debt due to be repaid on January 15 today, and will pay a small premium to willing sellers.
“A debt buy back prior to year end will decrease the forecasted debt to gross domestic product peak,” bond trader Ryan McGrath said.
He estimates that the European Central Bank holds between €1.5bn and €2bn of the Irish bonds after interventions in the markets in recent years, and will prove a willing seller.