Ireland’s six-year bond issue seen as ‘attractive’

Ireland’s auction of €750 million in six-year bonds today looks “attractive” bond analysts say.

Peter Chatwell, analyst with Mizuho, said that the 0.8 per cent Treasury Bond 2022 issue "stands cheap" on the Irish fitted curve, and the auction looks "attractive on spread and in relative value".

Danske Bank's Anders Moller Lumholtz said that the bond looks "very cheap" versus France as Brexit concerns have weighed, and it should attract strong demand.

Martin van Vliet, analyst with ING, says that the there now seems to be scope for Ireland to make “renewed/further progress in its transition toward semi-core status”, although he also noted that given Ireland’s strong trade links with the UK, this may be delayed until after the forthcoming Brexit vote.

The auction opened at 8 am on this morning and is confined to recognised primary dealers.

Last month the NTMA sold €750 million in 10-year notes at a record low interest rate of 0.817 per cent. This compares with a 1 per cent rate attached to similar bonds in mid-February.

Moody’s upgrade

Analysts also indicate that Ireland could be in line for a ratings upgrade from Moody’s tomorrow, with Mr van Vliet suggesting it is “probable”. In March the ratings agency warned that an upgrade would likely necessitate a further reduction at a “rapid pace” in the public debt ratio.