Tuesday 17 September 2019

Bond market shrugs off Brexit fears with €1bn loan to Ireland

NTMA chief Conor O’Kelly. Photo: Chris Bellew /Fennell Photography
NTMA chief Conor O’Kelly. Photo: Chris Bellew /Fennell Photography
Donal O'Donovan

Donal O'Donovan

The bond market shrugged off Brexit fears to lend €1bn to Ireland this morning at a price that means Ireland is in effect being paid to borrow.

The National Treasury Management Agency (NTMA) completed an auction of €1bn of Irish government bonds due to be repaid in 2029.

The bonds have a 1.1pc interest rate, but they were issued at a discount – or negative yield - so that in reality bondholders will get back slightly less than the full €1bn at the end of the 10 years.

Accepting such poor returns is a sign investors think growth and inflation in the euro area is set to remain weak.

Despite that there was strong interest in the Irish bonds, with demand more than double the amount of debt available.

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