Saturday 16 December 2017

NTMA may skip next bond auction

Louisa Fahy

Ireland could skip "a couple" of monthly bond auctions amid concerns that the mounting fiscal crisis in Greece will spread to other euro-area nations, the head of funding at the country’s debt agency said.

The premium investors charge to hold Ireland’s 10-year debt over the German bund, Europe’s benchmark government bond, has surged 60 basis points to 208 basis points since April 16.

“We have a sufficient buffer of cash to be able to carry on as normal,” Oliver Whelan of the National Treasury Management Agency, said in an interview with RTE radio today.

“If we had to skip a couple of months or so it wouldn’t cause us any problem.”

Ireland can “easily” weather the impact of the Greek crisis on financial markets, John Corrigan, the head of the agency, said this week.

The April auction of €1.5bn of bonds brought the total funds raised this year to €11.7bn, 59pc of the 2010 funding program.

Skipping an auction “is a no-brainer for the NTMA given that the Irish spread moves could reverse to a large extent,” said Harvinder Sian, a senior bond strategist at Royal Bank of Scotland in London, wrote in a note today.

“As long as Greece does not restructure then Irish paper remains very good value. If they restructure, then all the periphery is toast.”

The next Irish auction is scheduled for May 18.


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