Friday 22 September 2017

NTMA could raise as much as €3bn from State's new 20-year syndicated bond deal

In January last year, the NTMA raised €3bn through a syndicated sale of 10-year bond debt at a yield of 1.156pc. That was the third year in a row the agency ran a sale on January 7. Photo: Reuters
In January last year, the NTMA raised €3bn through a syndicated sale of 10-year bond debt at a yield of 1.156pc. That was the third year in a row the agency ran a sale on January 7. Photo: Reuters
Donal O'Donovan

Donal O'Donovan

The State is to issue a new 20-year syndicated bond deal in what looks set to be the first fundraising of the year by any European government.

A deal could be done as soon as today, with €2bn to €3bn expected to be raised.

The National Treasury Management Agency (NTMA) said it had mandated Barclays, Cantor Fitzgerald, Danske Bank, HSBC, JP Morgan and Morgan Stanley as "joint lead managers" of the bond sale. In traditional government bond auctions the debt is issued, or sold, to investors through primary dealers. In a syndicated bond the debt is underwritten by a group of banks, who then in effect sell on the risk to others investors.

In January last year, the NTMA raised €3bn through a syndicated sale of 10-year bond debt at a yield of 1.156pc. That was the third year in a row the agency ran a sale on January 7.

Yesterday, Irish 10-year government bonds, seen as the benchmark for investors, underperformed peers ahead of the expected new supply. But 10-year yields of 0.8pc remain well below the level seen at the same time last year, meaning it is cheaper for the State to borrow.

Irish Independent

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