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NTMA raises €6 billion from 10-year syndicate

The National Treasury Management Agency raised €6 billion in a sale of a 10 year bond today.

The funds were raised at a yield of 0.285% following strong demand from investors.

The issue drew almost €70 billion of demand, more than twice the previous record for an Irish sovereign bond.

The sale saw the NTMA closing in on its funding target to shore up government finances after the coronavirus pandemic. 

“Following today’s transaction we have now raised €18.5 billion from bond issuance this year, more than 80% of the mid-point of the €20-€24 billion funding range we have guided for the full year,” Frank O’Connor, NTMA Director of Funding and Debt Management said.

“Our borrowing programme is benefiting from a range of supporting factors including improvements in our sovereign credit ratings, our smoother and longer debt maturity profile and the accommodative stance of the ECB,” he added.

Euro zone peers Greece and Spain also drew strong demand for bond sales today, as very generous central bank stimulus measures, including from the ECB last week, and an EU recovery fund, have boosted appetite for non-core euro zone debt. 

Ireland has stressed that the coronavirus-related economic collapse is different to its last financial crisis a decade ago and that it can borrow its way out of trouble, whereas in 2010 it needed an EU/IMF bailout when funding became too expensive. 

The eye-watering demand seen for today’s debt issue, exceeding a record €33 billion seen for a seven-year syndicated sale in April, enabled Ireland’s debt agency to set the spread at 30 basis points over the mid-swap level, a lead manager on the deal said. 

Ireland expects the pandemic disruption to turn a budget surplus last year into a deficit of between 7.4% and 10% of gross domestic product this year.

Data last week showed the tax intake was unexpectedly stable by the end of May, mainly thanks to bumper corporate tax returns. 

The NTMA had mandated Barclays, BNP Paribas, Danske Bank, Davy, NatWest Markets and Nomura to sell the bond.

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