The National Treasury Management Agency Ireland is seeking to ease its funding requirements for 2016 by buying back some debt due for repayment that year and offering investors the chance to exchange their holdings for a 2023 bond.

The NTMA said it would offer a buyback and switch terms to holders of its April 2016 bond. The results of the transactions will be announced later today.

The debt agency said the country is fully funded for 2014 and, ahead of a bond auction next week, has already raised over 70 per cent of the €8 billion earmarked to fully pre-fund itself for 2015.

The NTMA said that it would buy a nominal €2 of the 2016 bond, which has a coupon of 4.6 per cent, for each €1 euro nominal of the 3.9 per cent 2023 bond it sells. Pricing for the switch and buyback will be announced at 10am.

The switch will cut the €10.2 billion of Irish bonds due to be redeemed in 2016, which compares to €7 billion outstanding in 2017. Ireland also has to pay back 3 billion euros of funding from the IMF and from bilateral loans provided by Britain, Sweden and Denmark in each of those years.

Ireland, which was granted an extension to the maturity of the EU loans that made up more than half of its €67.5 billion of external support, has just €5 billion of government bonds due for redemption in 2023 and €4 billion in 2024.

Other peripheral euro zone countries have also used bond switches to trim future funding needs, most recently Spain, which last month swapped expensive debt issued at the height of the euro zone crisis for a new 10-year bond.

Reuters