The National Treasury Management Agency (NTMA) today published its Annual Report for 2013 (1.97 MB, PDF format) and provided an update on activities across its range of business functions over the first half of 2014.

NTMA Chief Executive John Corrigan said that Ireland, following its exit from the EU/IMF programme without a precautionary credit line late last year, had confirmed its full return to normal market funding by syndicating a new 10-year benchmark bond in January and subsequently completing four successful bond auctions beginning in March. The NTMA has raised €7 billion in the bond markets so far this year which is almost 90 percent of its indicative funding target of €8 billion for the full year.

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“We have moved from the opportunistic and syndicated issuance which characterised our initial return to the markets to a series of scheduled bond auctions, marking the final step in achieving normal bond market access,” said Mr Corrigan.

“Having restored full market market access, our attention has now turned to the next significant maturity, the 2016 bond, which was reduced to €8 billion (from just over €10 billion) by the NTMA’s buyback and switch offer earlier this month. We are targetting further “top-slicing”¹ of the 2016 bond with the aim of smoothing the debt maturity profile.”

Mr Corrigan highlighted the significance of the NTMA Amendment Bill. In addition to putting a number of new NTMA functions (the Ireland Strategic Investment Fund, NewERA, and the Legal Costs Unit) on a statutory basis the legislation will, based on proposals put forward by the NTMA, replace the various boards and committees currently in place with a single overarching board to oversee all of its functions. NAMA will continue to have its own separate governance structure.

“This is very important in terms of the role the NTMA will play in post-crisis Ireland,” said Mr Corrigan. “Across the NTMA’s functions there is an implicit “invest in Ireland” objective and this new governance structure will allow the NTMA to work in a more integrated manner and take a strategic view across all of its different mandates towards that objective.”

Mr Corrigan said he expected that the move to the new structure would be completed in the Autumn. This would take place in tandem with the establishment of the Strategic Banking Corporation of Ireland  – a new company, set up to source low cost long-term finance  for SMEs – which the NTMA would staff and provide with business and support systems and services.

Infrastructure project delivery

The National Development Finance Agency (NDFA), which operates through the NTMA, is financial advisor and/or the procuring authority on a range of infrastructure Public Private Partnership (PPP) projects that got underway or were completed in the first half of 2014.

Schools Bundle 3 – providing a total of 5,700 school places at eight schools Donegal, Galway, Leitrim, Limerick, Westmeath and Wexford – was completed on schedule in April 2014.

The NDFA is the financial advisor on all €1.4 billion of road and non-road PPP projects in the Government’s Infrastructure Stimulus Programme. In April 2014 the first project launched under the programme – the N17/18 road PPP (a 57-kilometre stretch of motorway linking Gort and Tuam in Galway) – reached financial close and construction works commenced. This project, the largest in the stimulus programme, is the first Irish PPP to include institutional investor debt funding since the financial crisis.

The NDFA  has a dual role – as both financial advisor and procuring authority – in relation to the Programme’s non-road elements: the Grangegorman DIT campus; two bundles of schools; primary healthcare centres and seven regional courthouses. The competitions for all these projects are now underway. The preferred tenderer has been selected for Schools Bundle 4 and candidates have been shortlisted for the Schools Bundle 5, Grangegorman and Primary Care Centre projects.

Separately the NDFA is delivering 15 non-PPP school projects with a combined value of c.€80 million on behalf of the Department of Education & Skills.