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Bailout Republic?

Auction a ‘relative success’ as NTMA raises €1.5bn

The National Treasury Management Agency offloads €1.5bn of bonds in what is considered a ‘solid performance’.

IRELAND HAS SUCCESSFULLY raised €1.5bn in funds from the international markets this morning in what the National Treasury Management Agency has declared ‘relatively successful’ – with demand still vastly outstripping supply but with yields well up on previous auctions.

The yield on 8-year government bonds, maturing in October 2018, rose to 6.023% with a demand-to-offer ratio of 2.9, broadly in line with the demand from the previous similar auction.

The average rate offered on 4-year bonds maturing in January 2014, meanwhile, is 4.767%. Demand in this case was down on the last similar auction, though the fall was modest with the bonds still oversubscribed by 5.1 times, down from 5.4x.

The NTMA sold €500m worth of 4-year bonds and €1bn in 8-year bonds, raising the full amount of the €1.5bn it had pledged to seek.

By comparison, however, the last time the NTMA issued 8-year bonds, in June, the weighted average yield was a mere 5.088%. Just last month, when it had issued a round of 4-year paper, the average price was 3.627%.

On the secondhand bond markets, the secondhand price of 10-year government bonds fell back below 6.25% as the market heard news of the auction results, while the market price of secondhand 4-year bonds fell to 4.72% and 8-year bonds to just below 6%.

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