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Thursday 8 December 2016

Noonan and NTMA chiefs to brief IMF in the US next week

finance

Siobhan Creaton

Published 17/09/2011 | 05:00

Finance Minister Michael Noonan and senior officials from the National Treasury Management Agency (NTMA) will travel to Washington next week to meet the IMF, the ratings agencies and international investors as they continue their push to get Ireland back into the bond markets.

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Mr Noonan will have "scheduled" meetings with IMF officials, a spokeswoman said yesterday. This is the second such visit he has made in recent months. NTMA chief John Corrigan will also be meeting the head of the Standard & Poor's ratings agency and other international investors next week as they highlight the progress Ireland is making under the IMF/EU bailout programme.

The NTMA hopes to be able to borrow money again on the bond markets before the end of next year but the country has enough money to fund the Exchequer until December 2013.

The continuing concerns about the Greek debt crisis could affect the NTMA's return to the bond markets, Mr Corrigan told an Oireachtas committee last week. What happens in Greece, he said, "could throw us all off course".

But Mr Noonan and the NTMA will be keen to show how different Ireland's economic problems are from Greece and there are indications that investors are responding positively to Ireland's efforts to deal with its debt problems.

One analyst said yesterday they were seeing "positive signs" in countries like Ireland and Portugal.

"These countries can behave differently and have a different response to the crisis that is unfolding," Valentijn van Nieuwenhuijzen of ING Investment Management said.

"Greece is different to the other peripheral countries, let alone the rest of the eurozone".

Speaking to CNBC, he said the bond markets, which have driven up yields on Italian bonds recently, seem to be looking more favourably on Ireland as 10-year bonds have fallen from over 14pc in the middle of July to around 8.6pc this week.

They need to fall to between 5pc and 6pc before Ireland can return to the markets to raise funds outside of the bailout programme.

Meanwhile, analysts at Deutsche Bank said the fall in Ireland's bond yields suggested that developments here could be said to be "one of the few positives over the past few months among the euro-area peripheral sovereigns".

In a note, it said Ireland had performed better on the fiscal front than the targets set under the economic adjustment programme while Portugal remained more or less on track.

The reduction in the interest rate on the EU/IMF part of the rescue package is also a boost. The proposed changes in the rate of interest on some of the bailout loans could shave €650m a year off the overall interest bill down from €900m.

Economist Alan McQuaid of Bloxham Stockbrokers estimates the overall savings on Ireland's loans will be in the region of €1bn to €1.5bn a year, which he says is another positive development for government bonds and for Ireland.

Irish Independent

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