Monday 18 December 2017

NTMA team takes global trip to lobby bond market

Emmet Oliver Deputy Business Editor

The NTMA is to embark on its first investor roadshow since Ireland received its €85bn bailout in December with China among the countries to be visited, the Irish Independent understands.

The team from the NTMA, led by chief executive John Corrigan, will visit London, Paris, New York, Hong Kong, Singapore and the west coast of the US in an attempt to drum up fresh interest in Irish government debt.

While the NTMA is playing down the importance of the trips, ultimately the process is designed to keep channels of communication open with key bond buyers, so that if Ireland re-enters the bond market interest will be in place.

The treasury agency also wants to hold discussions with existing holders of Irish government debt. Discussions with this group is designed to convince these holders to hold their securities until maturity rather than dumping them in the market at marked down prices.

Talk of an Irish default has accelerated this process in recent months.

Ireland will have a tough job re-establishing its credentials as a good credit risk, but Mr Corrigan's team -- including key executives Oliver Whelan and economist Rossa White -- will be seeking to emphasise Ireland's recent bank stress-test exercise and the country's improving competitiveness.

Key European and US funds have been forced to sell their Irish bonds because of credit rating downgrades, but a different type of investor could still be enticed into buying Irish bonds in the future, sources point out.

For example, Asian sovereign wealth funds are seen as one target group, as are hedge funds who are interested in more long term strategies. Still Ireland's treasury planners will want to convince more traditional funds like Pimco and BlackRock to take a fresh look at the Irish investment case.

China in particular is a key audience for future purchases for Ireland, with the Asian superpower already buying Spanish bonds and expressing an interest in Portuguese debt.

The new Irish government has made it a top priority to get Ireland to a point where accessing the European bond market is possible again.

Currently high Irish government bond yields suggest this will be impossible, but the NTMA remains hopeful Ireland's recapitalised banking system will look different a year from now. The pace of deficit reduction could also be key to how the country is perceived.

Irish Independent

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