Kenny says bond market return a sign of 'progress'
Taoiseach Enda Kenny has described Ireland’s re-entry to the primary bond markets for the first time in two years ago as "a measure" of the economic progress the State has made.
Investors today paid €5.23 billion for bonds due to mature in 2017 and 2020 in a sale and exchange offer by the National Treasury Management Agency (NTMA).
It was the first time Irish bonds with maturities of two years or more had been offered to new investors since September 2010, a short time before the EU-IMF bailout.
The 2017 bond on offer today carried a yield of 5.9 per cent and the 2020 bond a yield of 6.1 per cent. The weighted-average yield on the combined transaction was 5.95 per cent, the NTMA said after the auction closed at 4.30pm.
Some €4.19 billion was spent on the two longer-term bonds on offer - a new five year bond maturing in October 2017 and an existing bond maturing in October 2020.
The remaining €1.04 billion was paid to exchange holdings of shorter-dated 2013 and 2014 bonds into the 2017 and 2020 bonds.
“We are very pleased with the success of today’s transaction, particularly the fact that investors committed more than €4 billion of new money to our first long-term issuance since September 2010," NTMA chief executive John Corrigan said.
"This marks a very significant step for Ireland on the way to full bond market access. As a result of today’s transaction, the NTMA has now covered a significant proportion of the €8.2 billion bond maturing in January 2014 which up until now has been seen as a challenging 'funding cliff'.”
Speaking in Co Clare, Mr Kenny said it was particularly important to note that the new bonds were long term offerings.
"It’s a measure of the progress we are making in emerging from the programme that we are in and it’s particularly important that these are long term papers that are involved here,” he said.
Minister for Finance Michael Noonan said he had always predicted that Ireland would be back in the markets by the summer of 2012 and insisted the move had not happened earlier than anticipated.
"Today’s commitment from investors of €5.23 billion represents very strong demand, the majority of which I understand to be from foreign investors," he said. "The strong demand and the fact that over €4 billion of this is new money is a significant step for Ireland in regaining our economic sovereignty."