Thursday 17 October 2019

NTMA raises €1bn

THE Government raised €1bn in a 10-year bond auction yesterday. The yield or effective interest rate was 1.63pc, less than it paid at the last auction in June.

The bonds actually carry an interest rate or coupon of 3.4pc but the yield was lower because the new borrowing was placed with investors at more than its nominal value.

The bid to cover ratio was relatively low at 2.5 times, meaning investors offered to lend €2.5bn at the price achieved compared to €1bn actually borrowed.

The NTMA has borrowed €8bn on the markets this year and is expected to seek up to a further €5bn by the end of the year in order to repay more expensive IMF bailout loans early.

Ulster sale shelved

The proposed sale of a portion of Ulster Bank's Project Achill loan portfolio has been postponed after a borrower was granted a High Court injunction.

The 'tranche E' share of the portfolio is tied to the loans of two companies controlled by Michael and Rick Larkin. The brothers contend the loans should not be sold pending the outcome of a separate legal action they are taking over an interest rate swap deal. The High Court granted a temporary freeze with a final decision due next week

Gap shares fall

Shares in Gap Inc fell yesterday after the retailer said it will replace CEO Glenn Murphy, who was credited with reviving the company during his seven-year tenure, and posting disappointing September sales.

Art Peck, who serves as president of Gap's growth, innovation and digital unit, will take over in February, the US-based company said.

Gap said that September's sales at stores open at least a year and online were little changed from a year earlier. Analysts had predicted a 1.2pc sales increase.

Endgame in Iceland

Iceland is getting closer to settling a bank creditor dispute that started in 2008 as the central bank signals an agreement may come in a matter of months.

"Everything indicates that we're getting closer to the final stop," Central Bank Governor Mar Gudmundsson said in Reykjavik. "This could happen in the next months."

Iceland has been working with external advisers to find a model that allows creditors in the failed banks to be paid without undermining the country's exchange rate. Failure to strike an agreement would delay any removal of capital controls "for years", the Central Bank said. To avoid that outcome, creditors will need to accept debt write-downs, it said.

Irish Independent

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