Irish bond issue may surpass €20bn

IRELAND MAY issue bonds worth more than the €20 billion so far scheduled for this year, but should avoid the temptation to seek too much capital for its banks, the head of the State’s debt agency said yesterday.

In contrast with fellow euro-zone member Greece, which has €20 billion in debt due by May, Ireland only has about €1 billion in bonds maturing this year and has won praise from markets for its efforts to cut its budget deficit.

In an interview, the chief executive of the National Treasury Management Agency (NTMA) said he wanted to prepare funding for debt worth up to €6 billion due in 2011. “If the opportunity arises to do more than the €20 billion on good terms, we may issue a little bit more to carry something into next year,” John Corrigan said.

The NTMA has already raised almost half its annual target in the first two of its monthly bond auctions and one syndicated sale.

Mr Corrigan said he was considering the possibility of a 30-year bond, which would be arranged through syndication, on top of the remaining scheduled auctions running until November.

“A 30-year issue is something we are told there is a lot of appetite for,” Mr Corrigan said.

Ireland is on track to correct its fiscal problems, with another round of tightening to follow in the budget for 2011, Mr Corrigan said, adding it would take until the end of this year to get sufficient clarity on the rescue of Ireland’s banks.

While Greece has come under pressure for understating the scale of its financial problems, Mr Corrigan said he was more worried about Dublin getting too tough on the banks it is rescuing.

“The concern is that we get ourselves into too pessimistic mode and end up unnecessarily over-capitalising the banks,” said Mr Corrigan, whose NTMA controls the €3.5 billion of preference shares the Government holds in both Allied Irish Banks and Bank of Ireland. Bond market analysts said that 30-year debt issuances were not uncommon for governments. – (Reuters)