Hopes high as Irish bonds go up for auction
THE National Treasury Management Agency will today launch its first bond auction since the nation's rating was lowered in the wake of the emergency budget earlier this month.
Officials at the NTMA will be hoping the timing proves fortuitous, not least because Ireland will be the only European country in the markets for funds this week, following on last week's €21bn splash by countries including France, Germany, Spain and the Netherlands.
With Ireland the only country offering new bonds, the week will be one of the quietest this year, a fact which helped prices yesterday. European bonds prices were also boosted as stock market losses fuelled a bout of bond-buying by investors looking for a safer haven.
The NTMA said the amount to be auctioned today will be in the range of €750m to €1bn. Two bonds are to be offered, a five-year bond at 4pc and nine-year bond with interest of 4.5pc. The NTMA hopes to hold two further auctions before mid-year, on May 19 and June 16.
Favourable
"The lack of supply this week is very favourable, so we are optimistic for the offer," one trader said yesterday.
Other favourable factors include the big payouts to bond holders this week, with redemptions and coupon payments this week alone amounting to €39bn and another €28bn due next week.
"Given the sentiment in the market and after the strong auction results out of Spain and France [Thursday], we expect the Irish taps to be taken down well," said Marcel Bross, strategist at Dresdner Kleinwort Research, in a note.
- Pat Boyle
