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Dublin: 11 °C Wednesday 19 June, 2019

#Bill Auction

# bill-auction - Thursday 26 August, 2010

IRELAND’S short-term treasury bill auction this morning seems to have gone rather well. Demand for the six-month treasury bills was ten times more than supply, and saw the bonds sold off with an average yield of 1.978% – compared to a 2.458% yield at the last similar auction just two weeks ago. Eight-month bills were four times oversubscribed with an average yield of 2.35%, down from 2.81%. That that, S&P!

THE NATIONAL TREASURY MANAGEMENT AGENCY (NTMA) is to hold a treasury bill auction today, hoping that a strong investor uptake will help the country soothe the fears of jittery investors.

The price of the interest offered on bills and bonds auctioned by the NTMA depends on how much investors demand – which in turn is determined by whether investors are confident or nervous about the chance of their original investment not being returned.

Today’s auction – of short-term treasury bills, maturing between three months and a year – will hope to raise €600m for the Exchequer, but also act as an early chance for Ireland to put the impact of the Standard & Poor’s ratings downgrade behind it.

A strongly-contested auction would drive rates down, showing that investors might be taking the S&P downgrade with a pinch of salt.

The NTMA itself criticised S&P’s decision to decrease Ireland’s rating to AA- from AA on Monday night, saying the projections assumed that the final cost of the banking bailout would vastly exceed the costs projected domestically.

Bids for the auction are closing about now (10:30am), and the yields will be disclosed later today.