THE NATIONAL TREASURY MANAGEMENT AGENCY has succesfully auctioned off another series of short-term treasury bills – and has managed to secure a smaller yield than it did for the same bills just two weeks ago.
The agency sold €250m in bills maturing in April 2011 at an average yield of 2.190%, a significant discount on the 2.348% rate offered for similar bonds in the last auction two weeks ago.
These bills were oversubscribed by 5.4 times, compared to an excessive demand of 4.1 times a fortnight ago.
Separately, the agency sold off €150m in bills maturing in five months time (February 2011) with a weighted average yield of 1.925%, also a significant discount on the 1.978% rate two weeks ago.
Demand for these fell slightly on two weeks ago, but demand still exceeds supply by 9.4 times compared to 10.1 two weeks ago.
The amount auctioned off, however, was at the lower edge of the amount the agency had indicated; it had said that between €400m and €600m of bonds were to be sold. The relatively small amount being sold off may indicate some conservatism on the part of the NTMA to keep yields down in the midst of market uncertainty about the 10-year yield.
The results will be almost universally interpreted a successful auction, with the market price of 10-year bonds currently sitting at about 6%, well above the rate offered for them (5.386%) at their last formal auction.
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