Saturday 25 November 2017

NTMA raises €1.5bn in bond sale

NTMA Chief Executive John Corrigan. Photo: Tom Burke
NTMA Chief Executive John Corrigan. Photo: Tom Burke

Dara Doyle

The National Treasury Management Agency has sold €1.5bn of bonds in an auction, its first since eurozone leaders unveiled their unprecedented aid package to help indebted euro nations.

Investors bid for 3.1 times the 2014 and 2020 securities offered, the NTMA said today.

It sold €750m of 4pc debt maturing in 2014 to yield an average 3.11pc and €750m of 4.5pc debt maturing in 2020 to yield 4.72pc.

European leaders on May 17 offered a €750bn rescue package as they sought to calm a rout in bond markets.

Concern that the mounting debt crisis in Greece would spread to other nations sent the premium investors charge to hold the debt of countries such as Ireland, Spain and Portugal soaring to euro-era highs earlier this month.

“In the context of recent nervousness in peripheral European government bond markets, this is a good result,” Dublin-based Glas Securities, which specialises in fixed-income markets, said in a note today.

At Ireland’s last auction of 4pc 2014 debt in February, the average yield was 3.03pc. A March auction of 4.5pc bonds maturing in 2020 yielded 4.43pc.

The treasury agency said in an emailed statement that it has raised about 66pc of its planned 2010 bond issuance program. The next auction is scheduled for June 15.

Ireland’s budget gap widened to 14.3pc of gross domestic product in 2009, almost five times the European Union’s 3pc limit. Greece’s deficit was 13.6pc of GDP, while Spain had a 11.2pc shortfall.

The difference in yield, or spread, between 10-year Irish securities and 10-year German bunds, the euro-region’s benchmark government securities, was at 181 basis points this morning. It widened to 306 basis points on May 7.


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