State’s first bond deal of year proves pop­u­lar

The Irish Times - Business - - BUSINESS NEWS - FIONA RED­DAN

The State’s first bond is­suance of the new year was the most pop­u­lar Ir­ish syn­di­cated bond sale ever, at­tract­ing a to­tal or­der book of some €18.1 bil­lion, the largest ever re­ceived.

The level of in­ter­est in­di­cates strong sup­port from both Ir­ish and in­ter­na­tional in­vestors in the sov­er­eign ahead of next week’s crunch vote on UK prime min­is­ter Theresa May’s Brexit agree­ment.

Yes­ter­day, the Na­tional Trea­sury Man­age­ment Agency (NTMA) beat ex­pec­ta­tions by rais­ing €4 bil­lion in a syn­di­cated sale of a new 10-year bench­mark trea­sury bond ma­tur­ing in May 2029.

The guid­ance head­ing into the auc­tion was that the agency would raise €3 bil­lion, but the bond was heav­ily over-sub­scribed, with a to­tal or­der book at over €18.1 bil­lion – the largest ever re­ceived by Ire­land for a syn­di­cated bond sale. It was con­sid­er­ably above the pre­vi­ous €14 bil­lion or­der books for bond deals in Jan­uary, 2014 and 2018. The funds were raised at a yield of 1.123 per cent, which com­pares with 0.94 per cent in 2018 and 1.15 per cent in 2016.

NTMA di­rec­tor of fund­ing and debt man­age­ment Frank O’Con­nor said the deal was an “en­cour­ag­ing start” to its 2019 is­suance pro­gramme, not­ing that by rais­ing €4 bil­lion, the NTMA has al­ready raised about 25 per cent of the mid-point of its tar­get of €14 to €18 bil­lion for the year.

“This level of de­mand, cou­pled with cash bal­ances of more than €15 bil­lion en­ter­ing 2019, leaves us well placed to meet the ma­tu­ri­ties that will arise dur­ing the year and to con­tinue our strat­egy of pre­fund­ing to meet fu­ture re­demp­tions. This gives us flex­i­bil­ity in our is­suance ac­tiv­ity and in­creases our abil­ity to bor­row on at­trac­tive terms and to con­tinue to di­ver­sify our fund­ing,” he said.

Last year the NTMA raised €17.25 bil­lion, with an av­er­age ma­tu­rity of 11.8 years.

Newspapers in English

Newspapers from Ireland

© PressReader. All rights reserved.