Business Irish

Thursday 23 November 2017

Traders urge NTMA to re-engage with bond markets after referendum result

Donal O'Donovan

Donal O'Donovan

BOND traders are calling for Ireland to get back into the markets, using the positive momentum from last week's referendum result.

However, surging volatility in the markets, linked to the deteriorating situation in Spain and Greece, could delay any attempt to return to traditional borrowing.

A gradual return to borrowing in the money markets is seen as the key to exiting the EU/IMF bailout and must be under way by at least the end of 2013 or the country is at risk a second bailout.

In January, John Corrigan, head of the National Treasury Management Agency (NTMA), said he planned to tap the markets by borrowing short-term bonds, known as bills, in June or July of this year.

Yesterday, Ryan McGrath, a trader at Dolmen Securities said he believed there was now no reason to delay a sale of Irish government 'bills'.

"We anticipate that the NTMA will re-engage with the markets and start to issue T bills in the very near future -- potentially by the end of this month," McGrath said yesterday in a note to potential investors.

Market fears around the situation in Spain are unlikely to put investors off an Irish return to the markets, he said.


Spain, Portugal, even Greece, have continued to issue short-term bonds -- known as 'bills' -- throughout the crisis, he said.

Yesterday, the NTMA published figures showing that there are just over €80bn of government bonds outstanding.

Last night, Mr McGrath said pricing since the referendum showed that money managers were increasingly happy to hold short-term Irish bonds, easing the way for a sale of short-term debt by the Government at a tolerable price within weeks.

Bills, usually paid back between three months and 18 months of being issued, are seen as a safer investment since they were untouched in the Greek debt restructuring, he said.

Yesterday a spokesman for the NTMA said the agency would not comment on speculation about when it would return to the markets.

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