Ireland may consider selling more bonds than initially planned this year to help finance the 2010 budget deficit as investor sentiment toward the country improves, according to the nation’s debt agency.
While the government has no “specific” plan, it may tap the markets if there is enough demand, said Oliver Whelan, the head of funding and debt management at the National Treasury Management Agency (NTMA).
Ireland has raised €22.7 billion, or 90 per cent, of the €25 billion earmarked this year, he said.
“If the opportunity in terms of market demand is there, I wouldn’t rule out at some stage doing some elements of pre-funding,” Mr Whelan said in an interview yesterday. “There is no particular plan to pre-fund at this stage.”
Ireland’s economy shrank 2.3 per cent in 2008 and may contract as much 12 per cent in the three years through 2010, the most for an industrialized economy since the Great Depression, the Economic and Social Research Institute said in April.
Standard & Poor’s lowered Ireland’s credit rating twice this year, to AA, citing the nation’s deteriorating finances.
The yield difference, or spread, between 10-year Irish bonds and the benchmark German bunds narrowed to 199 basis points as of yesterday. It peaked at 283 basis points in March.
Bloomberg