NTMA sells €500m of 12-month bills before ECB meeting

Bills drew demand from investors for 2.37 times the amount of notes that were on offer

The National Treasury Management Agency (NTMA) said that the notes were priced to carry a yield of -0.42 per cent

The National Treasury Management Agency (NTMA) said that the notes were priced to carry a yield of -0.42 per cent

 

Ireland’s debt office sold €500 million of 12-month Treasury Bills on Thursday morning, hours before the European Central Bank is set to confirm that it will formally end its €2.6 trillion bond-buying programme.

The National Treasury Management Agency (NTMA) said that the notes were priced to carry a yield of -0.42 per cent, meaning buyers will end up paying the State for the privilege of holding their money.

Negative yields have been a feature of the euro zone market for short- to medium-term government debt since the ECB initiate its bond-buying programme in 2015, or what is known as quantitative easing (QE).

The ECB has said that it plans to reinvest the proceeds from maturing bond investments for “an extended period of time”. Market followers will be listening closely to comments the institution’s president, Mario Draghi, at a press conference on Thursday afternoon that may shed further light on the reinvestment strategy.

“An era of extraordinary easy monetary policy in the euro zone is drawing to a close as the European Central Bank is set to formally announce that its massive bond-buying scheme will be terminated at the end of this year,” said Ryan McGrath, head of fixed-income strategy at Cantor Fitzgerald in Ireland.

The Irish Treasury Bills action drew demand from investors for 2.37 times the amount of notes that were on offer, the NTMA said.