Sunday 20 January 2019

First Irish bond sale to take place since end of Quantitative Easing

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Gavin McLoughlin

Gavin McLoughlin

THE National Treasury Management Agency (NTMA) is set to tap the bond markets for the first time this year, with a €3bn bond issue expected as soon as today.

The agency said yesterday that it had hired a number of banks to manage the sale.

The rate the agency receives on its bonds will attract market interest, as it will be the first major Irish bond sale since the end of quantitative easing (QE).

QE was a massive bond-buying programme embarked on by the ECB to try and pump more liquidity into the European economy.

The ECB's strong demand for bonds meant countries were able to borrow at low interest rates, but that may become more difficulty now the programme is finished.

BNP Paribas, Bank of America Merrill Lynch, Citi, Davy, NatWest Markets and Societe Generale have been appointed to manage the sale. Ten-year bonds will be issued.

In all, this year, the debt office plans to issue between €14bn and €18bn of long-term bonds. Traditionally, the NTMA moves into the market in January.

As well as the end of QE, Brexit will present a complication, with the NTMA previously warning that it could have an impact on the cost of money. In a presentation yesterday, the NTMA warned that a hard Brexit was a "distinct possibility".

Additional reporting Bloomberg

Irish Independent

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