Richard Bruton (Dublin North Central, Fine Gael)
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Question 186: To ask the Minister for Finance if the unexpected shortfall in taxation has led to the placing of additional loans by the National Treasury Management Agency during 2008; the volume and cost premium over the European Central Bank rate in each case; and the schedule of loan placing planned over the next 12 months. [45231/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The NTMA has advised me that its annual net funding requirement is determined by the level of the Exchequer Balance and the amount of maturities of existing loans. There were no major maturities in 2008, however the Exchequer Borrowing Requirement increased reflecting the shortfall in tax receipts in 2008.

NTMA net borrowing in 2008 was mainly by way of two major new benchmark bonds: a 10 year bond in April raised €7 billion, and a 3 year bond in November raised €4 billion. The 10 year bond was issued at a yield of 4.5%. The 3 year bond was issued at a yield of 4.02%. The ECB policy rates (main re-financing operations, fixed rate) on the relevant days in April and November were 4% and 3.25% respectively. However, the bond yields and the ECB policy rates are not directly comparable; the ECB rate is an overnight rate, while the bond yields take into account their longer maturities. The remainder of the NTMA's net borrowing this year will be carried out on the short-term commercial paper markets.

Based on Budget 2009 projections, the NTMA has advised the market of its funding plans for 2009 which includes a €5 billion bond repayment in April 2009. As such a gross debt issuance requirement of €18.4 billion next year is currently being planned.

The funding requirement in respect of 2009 will be met by a combination of new syndicated benchmark bond issues and auctions. The NTMA's objective is to further develop a continuous and liquid yield curve for Irish Government bonds. The NTMA has advised me that it is in a comfortable cash position and will decide on the timing of its issuance in the light of market conditions.