NTMA raises €5bn in bond sale

The National treasury Management Agency raised €5 billion in a bond sale today, accounting for 25 per cent of the year's funding programme.

The bonds, which mature in October 2020, have a yield of 1.62 per cent higher than the yield at the equivalent maturity date on the German bond curve.

NTMA chief executive John Corrigan said the sale leaves the NTMA in a comfortable position.

"The successful issue of today's EUR5 billion bond reflects the ability of Ireland to place long term debt with stable investors for longer periods and at narrowing spreads over Germany," he said.

Last week, the NTMA said it will issue €20 billion of Government bonds in 2010, with a series of 11 monthly auctions ranging between €1 million and  €1.5 billion. The funding target for 2010 is a 40 per cent reduction on the €33.7 billion issued in 2009.

The NTMA said in its end of year review that the funding requirement for 2010 would be lower than last year's due to a smaller projected exchequer deficit of €18.7 billion. The refinancing requirement of bonds will also be lower this year.

The State's national debt stood at €75.2 billion at the end of the year. Interest repayments totalled €3.2 billion last year, €686 million below budget as interest rates fell over the latter part of the year.

"Ireland's new syndicated bond is the bread and butter of its funding needs for this year," said Ciaran O'Hagan, head of Paris rates research at Societe Generale SA. It will raise the money "mostly through bond issuance," he said.

Additional reporting - Bloomberg