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Ireland buys back €500 million of its own bonds

The NTMA cancels €500 million of debts due to mature next month, after buying the bonds on the second-hand market.

Treasury Buildings in Dublin, home of the NTMA.
Treasury Buildings in Dublin, home of the NTMA.
Image: Julien Behal/PA Wire

IRELAND HAS BOUGHT back €500 million of its own national debt, erasing the need to repay it when it fell due next month.

The NTMA this afternoon said it was cancelling €500 million of a treasury bond which was supposed to be repaid on April 18.

The agency had been due to repay €5.125 billion next month, having raised the money in an auction in January 2012.

Because the NTMA has now bought some of the bonds itself, however, it would only end up repaying the money to itself – meaning it cuts down on administrative costs to simply cancel the bonds entirely.

The agency had already announced a similar move in late December, after buying another €500 million tranche.

The moves are likely to have been part-funded by the issue of new 10-year bonds worth €5 billion last week, and help to ease a ‘funding cliff’ where Ireland was due to make significant repayments of its national debt over the coming 12 months.

Last week’s auction ensured that Ireland had enough cash in hand to make nearly €12.9 billion in scheduled repayments, between the activities next month and in January 2014.

Those repayments will also include a €22 million repayment on its bailout loans, the first time that Ireland will have repaid some of the €56.5 billion it has borrowed so far from the EU, IMF, Britain, Denmark and Sweden.

Read: Ireland to auction €500 million in T-Bills tomorrow

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Gavan Reilly

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