NTMA raises €3.5bn in oversubscribed bond sale

The National Treasury Management Agency (NTMA) raised €3.5 billion on Thursday selling 10-year bonds, completing more than a third of its minimum full-year funding target less than two weeks into 2022.

The bonds, sold through a syndicate of banks and securities firms, were priced to carry an interest rate, or coupon, of 0.387 per cent, the NTMA said.

There was strong demand from a diversified investor base for the transaction, the debt agency said, adding that the total order book exceeded €27 billion and included more than 180 individual accounts.

“Today’s transaction demonstrated continued strong demand for Irish sovereign debt from a broad base of investors,” said Frank O’Connor, the NTMA’s director of funding and debt management, who was selected before Christmas become chief executive of the agency from July.

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“Ireland’s improving fiscal position and our strategy of pre-funding liabilities has left us with substantial cash balances and considerable flexibility in meeting our funding needs.”

The agency outlined last month that it aims to raise between €10 billion and €14 billion in international bond markets in 2022, marking a decline of up to 46 per cent on the amount raised last year as the Government’s Covid-related spending eases.

The amount raised in the syndicated sale is higher than the €3 billion figure that market sources had indicated on Wednesday, when the NTMA hired BNP Paribas, Cantor Fitzgerald Ireland, Citigroup, Danske Bank, JP Morgan and Morgan Stanley to manage the transaction.

Euro zone issuance

Cyprus was also in the bond market on Thursday, raising €1 billion during a busy period of euro zone government issuance. Italy, Spain and Portugal have also tapped debt markets in the past eight days.

Market interest rates, or yields, on euro zone government debt have risen since the European Central Bank decided on December 16th to wind down its €1.85 trillion pandemic bond-buying stimulus programme by the end of March, amid a spike in inflation.

However, euro zone bond yields eased back for a third session on Thursday after weaker-than-expected US producer price inflation data offered investors some relief from heightened speculation about the pace at which central banks may raise interest rates.