Monday 25 September 2017

Ireland is poised to return to the bond markets in test of investor confidence

Nick Webb

Nick Webb

Ireland is planning to return to bond markets in the coming weeks, despite the ongoing euro crisis.

The National Treasury Management Agency (NTMA) is dusting off plans to auction short-dated bonds to investors. Ireland has been effectively locked out of the bond markets since the IMF/EU "bailout" in December 2010.

"The NTMA is monitoring the situation closely and there are a number of important external factors that will influence the situation. However, as of now, we have not altered our plans to re-engage with the T-bill market during the summer months with a view to a more extensive engagement through next year," said the state agency.

It is understood that the NTMA has been briefing potential investors -- domestic and international -- in recent weeks. The bonds issued are likely to have short maturities of just three or four months and will raise several hundred million euro, according to bond analysts.

The auction will be hugely significant in that it will test the strength of investor confidence in the Irish "recovery story". However, the ongoing euro crisis has been described as "unhelpful" by the NTMA. Spain is poised to make a formal request for a bank rescue after consultants found that its banks needed up to €62bn in new capital to cover property loans going bad.

Spain is thought to be considering imposing losses on junior bondholders as part of the clean-up of its banking- sector debts.

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