NTMA to raise €500m in bond sale


Ireland is set to return to the bond markets on Thursday with a €500 million auction of treasury bills. It will be the sixth tranche to be sold since the National Treasury Management Agency (NTMA) re-activated the program last summer.

The monthly auction of three-month treasury bills follows a similar deal last month, when the NTMA sold €500 million at an annualised yield of 0.2 per cent.

The deal was significantly over-subscribed, with total bids of €1.894 billion received.

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.

In January, the NTMA successfully sold €2.5 billion in a syndicated tap deal, while expectations are that it may also look to issue a 10-year benchmark deal this year.

However according to Owen Callan, senior analyst with Danske Bank Markets, it is now "increasingly likely" that the NTMA will delay its return to the long-term bond markets, given other factors on the agenda such as a possible sale of Irish Life Assurance and the impending Italian election.

"Waiting a few weeks before issuing is not without justification, even if risk/reward would argue for a more imminent engagement with the bond market," he said.