NTMA increases bond deal to €4bn as demand surges

The National Treasury Management Agency (NTMA) raised a larger-than-expected €4 billion from a bond sale on Thursday, capitalising on strong demand for the new debt.

The bond, which will be due to be redeemed in 2050, attracted about €18 billion of orders, and was priced to carry an interest rate of 1.53 per cent, the NTMA said. The agency had originally planned to raise €3 billion from the transaction, sources said earlier this week.

The debt sale took advantage of a rally in European bonds so far this year as a raft of weak economic data has fuelled speculation the European Central Bank will have to keep its main rate at zero for longer than anticipated.

The deal means that the NTMA has so far raised about €9.55 billion through the sale of long-term bonds this year.

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“Today’s transaction demonstrates that investor appetite for our bonds continues to be strong and broadly based,” said Frank O’Connor, director of funding and debt management at the NTMA. “ We have now exceeded 50 per cent of the mid-point of our target of €14 billion – €18 billion for the year.”

Most of the debt is being raised to finance the repayment of maturing bonds in the coming years.

Spanish bonds

A Spanish bond sale also attracted significant demand, underlining how both countries are moving away from the “periphery”, a phrase used to describe lower-rated and more volatile euro zone bond markets.

Spain sold €4.08 billion of debt of varying maturities, including an October 2048 line.

Separately, the market interest rate, or yield, on Irish 10-year bonds hit its lowest since December 2017 at 0.49 per cent during trading on Thursday, while Spanish 10-year yields were near a 2½ year low at 0.946 per cent.

The Irish bond sale was managed by a syndicate of banks and brokerages comprising Barclays, BNP Paribas, Cantor Fitzgerald Ireland, Danske Bank, Deutsche Bank and Goldman Sachs. – Additional reporting: Reuters