State debt agency NTMA sells €500m of short-term debt

The National Treasury Management Agency sold €500 million of short-term debt on Thursday in a deal that will see investors pay the State a record 0.42 per cent rate for the privilege of holding their money for one year.

The debt agency said that it received €1.331 billion of bids from investors as it auctioned the Treasury Bills, which marks what is expected to be its last engagement with the capital markets of the year.

Bond yields have risen globally in the past month, as the election of Donald Trump as the next US president has sparked speculation that his planned economic stimulus will stoke inflation and lead to an acceleration of interest rate increases. On Wednesday, the US Federal Reserve surprised the market as members of its rates-setting committee accompanied a widely-expected rate increase by projecting three further hikes next year.

Still, the NTMA managed to get its 12-month bills sale away on Thursday at a yield of minus 0.42 per cent, the lowest negative yield it has ever achieved in a debt sale.