Sunday 17 December 2017

NTMA raises €500m in 15-year bond auction

Minister for Finance Michael Noonan. Photo: Gareth Chaney Collins
Minister for Finance Michael Noonan. Photo: Gareth Chaney Collins
Colm Kelpie

Colm Kelpie

The National Treasury Management Agency (NTMA) has raised €500m through the auction of a 15-year bond.

The sale of the 2.4pc Treasury Bond 2030 achieved a yield of 1.563pc, the State's debt management agency said. Total bids received amounted to €1.58bn, which was 3.15 times the amount on offer.

Following yesterday's auction, the NTMA has raised €8.5bn in the bond markets so far this year.

Some €4bn was raised by the NTMA last week with the issuing of the first 30-year bond.

The bond received €11bn worth of interest and will mature on February 18 2045.

The yield - effectively the interest rate - was 2.088pc.

Thirty-year bonds have surged this year as meagre 10-year yields push investors to seek the higher yields of the longer-maturity debt, and the European Central Bank prepares to buy the bonds as part of the €1.1 trillion quantitative easing programme. Italy and Portugal announced plans last month to lock in cheap borrowing costs for a very long period.

The NTMA is looking to raise €12bn-€15bn in long-term bonds this year.

NTMA announced late last year that it would issue a statement at the beginning of each quarter outlining the auction plans.

It also intends to hold at least one syndicated bond deal during the year.

Subject to market conditions, the NTMA said it may also offer investors the chance to switch some of their holdings of the 4.6pc Treasury Bond of April 2016 into longer dated bonds.

Finance Minister Michael Noonan has pointed to the issue of Ireland's first 30-year bond at record low interest rates as a sign of the country's economic recovery.

Irish Independent

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