Ireland does not need nor want private investors to swallow losses on Irish debt and may seek to put its "toe" back in the debt markets in the second half of 2012 with a sale of treasury bills, the head of the country's debt management agency said.
"Ireland doesn't need and is not suggesting that there be any private sector involvement in the Irish solution," John Corrigan, the chief executive of the National Treasury Management Agency (NTMA), said.
"Any such involvement, would be an extremely risky path to go down.
"Any such suggestion would result in a permanent elevation in our borrowing costs," Mr Corrigan said.
US investors including hedge funds will probably be the first buyers as Ireland seeks to return to bond markets after a roadshow by the agency this year generated "huge interest", according to Mr Corrigan.
Ireland sought an international bailout last year as investors shunned government and bank debt after the economy shrank about 15 per cent since 2007. While the NTMA said the state is fully funded through 2013, the Government has said it wants to test the market next year.
"International investors acknowledge the strong progress Ireland is making in tackling its domestic problems, but the stresses in the euro zone overshadow everything else," Mr Corrigan said at a briefing today in Dublin.
The yield on 10-year Irish bonds has climbed to 12.424 per cent since November 26th, two days before the European Union and the International Monetary Fund signed off on the coutry's €85 billion bailout.
European leaders arrived in Brussels seeking solutions for the 21-month-old sovereign-debt crisis as Luxembourg Prime Minister Jean-Claude Juncker said Greece may not be able to avoid a default.
Speculation has risen that Ireland will need a second bailout when its existing €85 billion rescue package from the EU and the IMF runs out in 2013, but Mr Corrigan remains confident Dublin will be able to meet its funding needs from the markets.
The NTMA is planning to issue treasury bills in the third quarter of 2012 before issuing bonds, likely in 2013.
Reuters
