NTMA to hold bond auction on Thursday

Monday 10 March 2014 18.04
Auction 'marks the full normalisation of Ireland's presence in the markets' says NTMA CEO John Corrigan
Auction 'marks the full normalisation of Ireland's presence in the markets' says NTMA CEO John Corrigan

Irish bond yields rose after the National Treasury Management Agency announced its first regular debt auction since completing an international bailout.

The debt agency said it wants to raise €1 billion in an auction of 10-year bonds on Thursday, three months after it became the first euro zone country to exit an EU/IMF bailout. 

The NTMA had said in February it would resume regular bond auctions this month.

This is the first such auction on the main bond markets since September 2010. The NTMA said the bond will mature in 2024.

"The resumption of scheduled bond auctions builds on the phased re-entry to the capital markets achieved by the NTMA over the past two years and marks the full normalisation of Ireland's presence in the markets," commented the agency's chief executive John Corrigan.

Irish bond yields rose by 3 basis points to 3.1% as investors made room on their books for the new bonds.

However, analysts said that demand for Irish debt remained strong, particularly after ratings agency Moody's in January upgraded the country's debt to investment grade from junk.

The prospect of a successful return to the regular market for Ireland helped yields on Portuguese bonds to near four-year lows today. Portugal hopes to follow Ireland's example and exit its bailout later this year. 

Portuguese bond yields fell 7.5 bps to 4.53%, their lowest since April 2010.

Investor appetite for higher returns following the European Central Bank's decision to leave interest rates on hold helped Spanish and Italian yields lower, with the former down 4.6 bps at fresh eight-year lows of 3.32%.

NAMA redeems €850m of senior bonds

National Asset Management Agency has announced the redemption of €850m worth of senior bonds relating to the Irish Bank Resolution Corporation.

Following the appointment of special liquidators to IBRC last year, NAMA issued €12.9 billion in senior bonds to the Central Bank to cover a floating charge on the bank.

The agency has now redeemed almost €3.3 billion worth of these bonds, leaving €9.65 billion of bonds in issue.