RATING AGENCIES EXPECTED TO MOVE ON IRISH STATUS AFTER SUCCESSFUL SALE OF 10 YEAR BONDS - The long anticipated sale of the 10 year Irish bond yesterday has been described as particularly significant by the chief executive of the NTMA, John Corrigan. The ten year bond is considered a flagship product in sovereign debt markets. Bonds with long maturities are attractive to pension funds and insurance companies, who tend to leave their money in the bonds longer. The 4.15% yield on the bond was welcomed by Mr Corrigan. This latest sale brings the total raised by the NTMA this year to €7.5 billion, out of a target of €10 billion for the year so the NTMA may not need to raise much more during the remainder of the year.
John Finn, Managing Director of Treasury Solutions, said the most important thing for the National Treasury Management Agency was to ''get the deal done''. "They got the money in. They've achieved 85% of their funding target for the year. The 10 year bond issue is significant because anyone who is willing to lend for ten years have some confidence in your ability to repay," John Finn says. He says he believes the move will force the ratings agencies to take another look at Ireland. ''One agency has us on junk. I think they'll move us out that fairly quickly. After the promissory note deal, S&P moved us to stable. They might move us to positive. But I expect we'll be moved from junk pretty quickly," he concludes.
On the mortgage arrears policy announced by the Central Bank yesterday, John Finn said there were problems with the concept of restructuring. "The only incentive for the banks is that they have to deal with this eventually. There is a PCAR review coming up in June where they look at the capital adequacy of the banks. If the property market doesn't look like it is bottoming out, the question arises as to whether the banks have enough capital - and if they don't we could back into the vicious cycle again,'' he cautions.
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MORNING BRIEFS - Samsung is going for an Apple style launch of its latest smartphone today. It will unveil the Galaxy 4S at an event in Radio City Music Hall in New York which will be beamed live on video screens around Times Square. In an interview with Reuters, Apple's marketing chief has been dismissing the launch saying that most Android users were stuck on older versions of the software. It underscores the pressure that Apple is feeling in the mobile market - Samsung surpassed Apple to become the world's largest smartphone maker last year with 29% of handset shipments in Q4 compared to Apple's 21%.
