NTMA raises €1bn as regular bond auctions resume

The National Treasury Management Agency (NTMA) has raised €1 billion in an auction of benchmark 10-year bonds, reaching in its target in the first regular sale of Government debt since exiting the bailout in December.

The agency said it received a total bids of 2.9 times the amount on offer, with a yield of 2.967 per cent on the bonds.

“The completion of today‘s auction marks Ireland‘s full return to the markets for the first time since September 2010 and brings to a successful conclusion the NTMA‘s programme for a phased return to the markets carried out over the past two years,” said NTMA chief executive John Corrigan. “ The €1 billion funding raised today, together with the €3.75 billion raised in the syndicated issue on 7 January, amounts to almost 60 percent of our funding target of €8 billion for the full year.”

Yesterday, Irish 10-year yields hit a new record low, falling 4 basis points to 3.01 per cent.

Demand for Irish bonds has strengthened since ratings agency Moody’s upgraded the country’s debt to investment grade from junk in January.

Today’s sale is expected to go well given the small amount of paper on offer.

Irish 10-year yields have tumbled from levels close to 15 per cent at the peak of the debt crisis in 2011 as brighter economic prospects in the currency area have prompted investor to seek higher returns.

Sentiment in peripheral euro zone bonds remained upbeat even as growth and credit concerns in China prompted investors to trim their exposure to riskier assets such as equities and scramble into top-rated government bonds.

Comments by European Central Bank policymakers affirming the bank was ready to ease policy further if warranted, underpinned demand for most euro zone bonds.

Yesterday, European Central Bank executive board member Peter Praet said the central bank was ready to use non-standard policy measures to deliver stable prices helped the rally in top-rated bonds.