independent

Wednesday 23 April 2014

Government to sell 10-year bond

Michael Noonan

THE Government will issue a 10-year bond in the first half of this year, Finance Minister Michael Noonan said.

Mr Noonan said the International Monetary Fund (IMF) is prepared to “hold our hand” as we exit the EU/IMF/ECB bailout programme at the end of the year.

And the government is planning to sell a 10-year bond in the first half of this year, as part of its campaign to qualify for the ECB bond- buying programme as a “backstop,” Mr Noonan said in an interview with Bloomberg.

Earlier today, the Government paid slightly more to borrow €500m in short term debt on the markets today than the last time it tapped investors. 

The National Treasury Management Agency, which manages the country’s debt, paid 0.24pc to borrow the low risk, short term debt known as “bills” at today’s debt auction.

That’s up from an interest rate of 0.2pc charged in January for a similar deal.

Demand from investors for the new debt, which will be repaid in there months, remains firm, but was not as strong as in January.

The key measure of investor demand is known as the bid to cover ratio.

It compares the amount of cash offered in the auction to the amount of bills sold. There was 3.3 times more cash offered today than bills sold down from 3.8 last month.

Today’s auction of Government debt is the latest in its now regular roll-over of three month “bills.”

There are currently €1.5bn of short term bills in circulation.

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