THE NATIONAL TREASURY Management Agency (NTMA) is to sell €500 million in Treasury Bills in an auction to be held on Thursday.
The auction of the three month bonds will be the latest attempt to test the waters for Ireland’s eventual return to normal lending markets when the country emerges from the bailout.
A similar auction in January saw €500 million worth of Treasury Bills (or T-bills) sold with a yield of 0.20 per cent.
Owen Callan of Danske Bank Markets said despite the positive fallout from the promissory note deal, the NTMA may delay any long-term bond issues until next month due to events in Ireland and Europe, including the impending Italian election and the possible sale of Irish Life Assurance.
“While there may have been a political hope for the NTMA to take advantage of the promissory note deal and to immediately issue long term bonds into the market, Ireland already has a huge cash buffer (€22 billion or so), and reacting too quickly to the deal could also have increased criticisms from those claiming that deal would be akin to ‘monetary financing’” said Callan.
“As such, waiting a few weeks before issuing is not without justification, even if risk/reward would argue for a more imminent engagement with the bond market”.
The auction will open at 9.30am on Thursday morning and close at 10.30am.