NTMA issues €500m of three-month bonds

Auction represents a further test of Ireland’s ability to raise funds from capital markets

Minister for Finance Michael Noonan and NTMA chief executive John Corrigan during the NTMA annual report launch at Treasury Buildings, Dublin. Photograph: Brenda Fitzsimons/Irish Times

Minister for Finance Michael Noonan and NTMA chief executive John Corrigan during the NTMA annual report launch at Treasury Buildings, Dublin. Photograph: Brenda Fitzsimons/Irish Times

Thu, Apr 18, 2013, 12:58

The National Treasury Management Agency (NTMA) issued €500 million of three-month bonds this morning, with an annualised interest rate of 0.195 per cent.

This was the NTMA’s fourth auction of Government debt this year, and a further test of Ireland’s ability to raise funds from capital markets.

The agency said the total bids received amounted to €2.4 billion, which was 4.8 times the amount on offer.

The State's previous three-month auction in March had an average yield of 0.24 per cent and a bid cover of 3.4.

Owen Callan of Danske Bank said both the yield and the bid cover “were the best we have seen” since the NTMA returned to the markets in the middle of last year.

"Today's auction underscores the continuing strong investor sentiment for Ireland, particularly on the back of the recent extension to Ireland's EFSF and EFSM loans, agreed last week by both Eurogroup and Ecofin."

"Of note in today's auction was a number of buying interests who had previously shied away from the Irish T-bill market, suggesting that the market is slowly gathering more and more new names comfortable with the Irish story and outlook."

Subject to market conditions, the NTMA plans to follow today's auction with two further bond sales in the second quarter.

The NTMA has set a total funding target of €10 billion for 2013, as Ireland prepares its exit from the EU-International Monetary Fund bailout programme.