NTMA publishes 2023 mid-year business update

Wednesday 5th July 2023

The National Treasury Management Agency (NTMA) has today published its 2023 mid-year business update alongside its 2022 Annual Report.

Comments by Frank O’Connor, NTMA Chief Executive:

  • Ireland’s General Government debt fell by €11bn to €225bn in 2022 and has the potential to fall below €200bn by 2030.
  • The fall in 2022 was the first since 2019 and the largest since 2014.
  • The NTMA’s Funding and Debt Management strategy has helped mitigate the effect of higher interest rates, with the 2022 interest bill unchanged versus 2021 at €3.3bn arising from fixing borrowing costs at historically low rates for long terms.
  • We have entered the higher interest rate cycle in a strong position - Ireland needs to borrow less over the coming years as a result of our pre-funding strategy, strong cash balances and a favourable Exchequer position.
  • Investor and ratings agency sentiment towards Ireland remains positive, as evidenced by the strong demand for our debt and the pattern of ratings upgrades which have continued into 2023. S&P recent upgrade puts Ireland at the AA rating – a level last seen in 2010. It is also the highest current rating for Ireland across all the major global ratings agencies.
  • This positive sentiment underlines the importance of maintaining close ongoing contact with investors through the combination of an ongoing investor relations programme and careful management of new issuance.
  • Today we are also reporting that ISIF (Ireland Strategic Investment Fund) committed €823m across 20 investments in support of economic activity and employment in Ireland, bringing the total committed in Ireland to €6.5bn across 188 investments.
  • ISIF’s ability to act as a catalyst for co-investment of €10.2bn resulting in a total commitment to ISIF-backed investments in Ireland of €16.7bn.
  • ISIF has generated over €2bn in investment returns since inception, with an annualised return of 2.9pc per annum despite the decline in the portfolio value on foot of significant market volatility in 2022.
  • 2022 also saw the NDFA (National Development Finance Agency) deliver continued progress in education and social housing infrastructure, with new higher education facilities being delivered in the first bundle of the Higher Education PPP Programme in Technological Universities in Athlone, Cork, Tralee, Blanchardstown and Tallaght and the Institute of Art, Design and Technology in Dún Laoghaire. Four bundles of homes are being procured under the Social Housing PPP Programme, which will bring total delivery under the Programme to 3,600 homes.
  • NewERA advised on a total of 167 assignments totaling €7.6bn during 2022 and a key focus for NewERA during 2022 related to major climate and energy projects to assist with the transition to a lower-carbon energy future.
  • The State Claims Agency (SCA) over the course of 2022 resolved close to 3,100 general and clinical claims. It also began preparations for assuming responsibility for the management of the new statutory Garda Compensation Scheme.
  • Over the past 30 years, the NTMA has grown from a single function as a sovereign borrower to a manager of a wide-ranging portfolio of State assets and liabilities. The many additional mandates entrusted to the Agency by Government over that period is a testament to the agility, professionalism and commitment of our people, and to the scalable, flexible operational platform we have put in place.

Comments by the Minister for Finance, Michael McGrath TD:

“The NTMA’s 2022 Annual Report highlights the value provided to the State by the NTMA with the Agency continuing to both communicate and engage with market counterparties on behalf of Ireland to ensure that our borrowing requirements are met.

I am very pleased to see Investor and ratings agency sentiment towards Ireland remaining positive, as evidenced by the strong demand for our debt and the pattern of ratings upgrades including a recent upgrade by Standard and Poor’s to their AA rating – a level last seen in 2010.

The benefits of the NTMA’s strategy of pre-funding liabilities before they became due continues to deliver through having locked in long-term borrowing on favourable terms. This has helped mitigate the effect of higher interest rates, with the 2022 interest bill unchanged against 2021.

Meanwhile, it is very important to note the major contributions that ISIF has played since its inceptions, deploying capital effectively across a range of priority investment themes while maintaining its double bottom mandate of delivering a strong economic impact and a commercial return.

I also want to acknowledge the complex and skilled work that takes place in the State Claims Agency to mitigate risk and manage the exposure of the State to litigation; in NewERA to enhance the financial performance and the governance of State entities; and in the National Development Finance Agency to procure and execute major infrastructure projects.”

2023 mid-year business update and 2022 annual report – key points

Funding and Debt Management

The NTMA’s pre-funding strategy, coupled with the improved fiscal position has resulted in reduced issuance as yields rise. Benchmark bond issuance in 2022 was €7.1bn – with a similar level expected for 2023. This is well below the annual average of over €18bn from 2017 to 2021.

The bond issuance in 2022 was at a weighted average yield of 1.1pc and a weighted average maturity of 14.8 years. A further €0.2bn was raised from two private placements with maturities of 60 and 100 years.

We expect the average interest rate on Ireland’s debt will remain at c. 1.5pc this year, and that the interest bill for 2023 will be at a similar level to 2022 and 2021. Indeed, we expect the interest bill to stay relatively stable over the next three to four years.

Our pre-funding strategy means that we have over €25bn in cash and liquid assets at the half year point, which reduces the requirement for borrowing at higher rates in the coming years.

Ireland’s public debt has one of the longest average maturities in Europe. At 10.4 years currently, the long average life of the medium/long-term debt portfolio means debt maturities are relatively limited in the years ahead, reducing refinancing risk in a higher interest rate environment.

Bond issuance totalling more than €100bn since 2017 had a weighted average maturity of almost 14 years.

So far in 2023, the NTMA has issued €6bn in benchmark bonds at a weighted average yield of 3.2pc and a weighted average maturity of 19.5 years. Given the strong cash position and fiscal outlook, there is just one more bond auction scheduled for 2023 meaning the NTMA will fund to the lower end of this year’s €7-€11bn funding range.

Green bonds have continued to grow in significance, as the 2023 debt issuance programme commenced with the syndicated sale of a new 20-year Irish Sovereign Green Bond (ISGB) raising €3.5bn – the second-ever ISGB to issue.

Two major ratings upgrades so far in 2023 – Moody’s moved to Aa3 with a stable outlook, its second upgrade in less than a year; and S&P moved to AA with a stable outlook, the highest current rating across all major global ratings agencies.

Ireland Strategic Investment Fund

ISIF made 20 investments totalling €823m in 2022, bringing total ISIF commitments to €6.5bn across 188 investments and €10.2bn of co-investment commitments since inception, a co-investment multiple of 1.6 times.

So far in 2023, ISIF has approved a further €311m in investments across its key themes of climate, scaling indigenous businesses, housing and enabling investments and food and agriculture.

Over €500m committed as part of €1bn climate investment programme.

Over €130m committed as part of €500m programme to unlock the economic potential of Ireland’s 5 regional cities.

€1.2bn committed to residential housing to end-2022.

2022 market volatility in global equity markets saw ISIF’s portfolio decline by -6.7%, reversing its strong 2021 investment gains.

ISIF has generated €2bn of accumulated returns between inception and end-2022, an annualised return of 2.9pc per annum.

National Development Finance Agency

Achieved financial close on Higher Education PPP Bundle 1 in December 2022, paving the way for the delivery of over 5,000 student places in three Technological Universities (Technological University of the Shannon, Technological University Dublin and Munster Technological University) and at Dún Laoghaire Institute of Art, Design and Technology when construction completes between late 2024 and mid-2025.

Procurement process progressing for Higher Education PPP Bundle 2, which is expected to deliver c. 3,600 student places in three Technological Universities (South East Technological University, Atlantic Technological University and Technological University of the Shannon).

Further progress in PPP social housing delivery with Bundle 3 in procurement and Bundles 4, 5 and 6 in development. This will bring total delivery under the Social Housing PPP Programme to 3,600 homes.


Provided financial and commercial advice to Government Ministers and Departments in relation to 21 commercial State sector companies, including 18 companies designated to NewERA and three companies by agreement with the relevant Department/s.

Increased both the range and number of advisory assignments delivered during 2022 with a total value of €7.6bn across 167 assignments.

Major focus on energy and climate related assignments to assist in the transition to a lower carbon energy future.

Received Government approval of the Climate Action Framework for the commercial State sector, supporting them in meeting their objectives under the Governments Climate Action Plan.

State Claims Agency

Managing a portfolio of over 11,200 active claims across its general and clinical claims portfolios. The SCA resolved close to 3,100 claims in 2022.

Resolved 58pc of claims without court proceedings being served.

The SCA continued to pursue mediation as an alternative to the formal court process through 2022, particularly with regard to complex clinical claims. 34pc of claims concluded by the clinical claims team in 2022 where damages were paid involved a mediation process.

Legal Costs Unit settled 1,225 claims for legal costs incurred by third parties, achieving a 41pc reduction on the amounts initially claimed.

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