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Wednesday 7 December 2016

NTMA to raise €750m in its first bond sale following Government formation

Published 10/05/2016 | 02:30

Last month the NTMA auctioned off another €750m worth of bonds at record low interest rates
Last month the NTMA auctioned off another €750m worth of bonds at record low interest rates

The National Treasury Management Agency (NTMA) is to raise €750m from the sale of six-year treasury bonds on Thursday.

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The bonds will be sold at the NTMA's first auction since the formation of the new Government.

The auction of the 0.8pc 2022 treasury bonds, which will be conducted on the Bloomberg Auction System, will begin at 8am and is confined to recognised primary dealers only.

A non-competitive auction for 15pc of the amount sold in the competitive auction will immediately follow and will close at 10am on Friday.

Last month the NTMA auctioned off another €750m worth of bonds at record low interest rates with investors disregarding political uncertainty surrounding the formation of the Government at the time.

April's NTMA auction was the first since the inconclusive election earlier in the year.

Bonds were sold with an interest rate of 0.817pc, down significantly on the 1pc yield associated with similar bonds auctioned in February.

In March the NTMA issued its first ever 100-year government bond at an ultra-low rate of 2.35pc. The bond was sold by private placement through Goldman Sachs International Bank and Nomura.

The sale of the 100-year bond was largely viewed as a big vote of confidence in Ireland as a sovereign issuer.

At the time the NTMA said it had received "significant positive feedback" from the sale.

Since then the NTMA has said it remains open to more sales similar to the 100-year bond.

So far the State-controlled NTMA has sold €4.75bn worth of bonds, placing it on track to meet its target for the year of between €6bn and €10bn.

Another auction of treasury bills is set to take place on June 16.

Outside of bond sales the NTMA also controls the Ireland Strategic Investment Fund (ISIF), which has recently pledged €54m in long-term funding to Dublin City University.

ISIF director Eugene O'Callaghan said education was a key part of the country's competitiveness.

"We have also utilised one of the Fund's key differentiating features - our long-term investment horizon - to facilitate significant parallel funding by the European Investment Bank."

Irish Independent

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