Ireland’s first 100-year bond set to raise €100m

The State has issued debt with a 100-year maturity for the first time, raising €100 million in a bond which will be repaid in 2116.

The sale follows an approach to the National Treasury Management Agency from an institution seeking to make very long-term investment in Irish debt.

The deal, which closed yesterday, is believed to have been concluded with a single investor in continental Europe with operations in the life insurance or pension sectors. Such firms have a particularly long investment horizon in light the the long-term commitments undertaken by their business.

The transaction comes in a week in which Ireland commemorates the centenary of the 1916 Rising. The bond, which carries an annual yield of 2.35 per cent, will be repaid during the bicentenary of the Rising.

Little more than two years after Ireland’s exit from the EU/IMF bailout, the treansaction reflects international appeal for Irish sovereign debt.

“This ultra-long maturity is a significant first for Ireland and represents a big vote of confidence in Ireland as a sovereign issuer,” said Frank O’Connor, NTMA director of funding and debt management.

The issuance of the 100-year debt provides a pricing reference point for potential investors who may seek to buy other long-dated Irish debt.

For example, the record of the date and pricing of century-debt would provide some guidance to investors who might have an interest in buying bonds with a 50-year or 70-year maturity.

“We might never do another one,” Mr O’Connor said. “We get reverse enquiries, lots of queries. Many times we came close to maybe doing a small deal. This gained a bit of traction. It took a couple of weeks eventually.”

The debt was issued under the NTMA’s euro medium term note programme, under which it can issue debt to any maturity in a number of currencies. “In theory we could issue as long under that programme as we want,” Mr O’Connor said.

The note was sold by private placement via two of the NTMA’s primary dealers, Goldman Sachs International and Nomura International. Prior to the deal, Ireland’s longest-dated debt in issue to private investors was a 30-year bond.

The Beglian authorities sold €50 million in 100-year debt at an annual yield of 2.5 per cent last August.