State 10-year borrowing costs have fallen below zero
The bond market shrugged off Brexit fears to lend €1bn to Ireland at a price which means the State is being paid to borrow.
The National Treasury Management Agency (NTMA) completed an auction of €1bn of Irish government bonds due to be repaid in 2029. The bonds have a 1.1pc interest rate, but they were issued at a discount - or negative yield - so bondholders will get back less than €1bn at the end of the 10 years. It is a sign investors think growth and inflation will remain weak, a point hammered home by the ECB in Frankfurt hours after the Irish bond deal.
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Despite the extremely low pricing there was strong interest in the bonds, with demand more than double the amount of debt available. The State has borrowed €12.25bn on the bond market this year so far.
Other Irish borrowers are also in the market. Permanent TSB has mandated banks to arrange an investor roadshow ahead of a planned bond, and Kerry Group will issue a 10- year euro denominated bond as early as today.