LONDON (MNI) – Ireland aims to achieve sustainable bond market
re-entry over the coming months and through 2013 and plans to issue
inflation-linked bonds, said John Corrigan, chief executive of the
National Treasury Management Agency (NTMA), on Wednesday.
Speaking at an event in Dublin hosted by the Leinster Society of
Chartered Accountants, Corrigan said Ireland continues to face
challenges but that international investors are encouraged by positive
signs emerging from the Irish economy.
“The NTMA’s objective is to achieve sustainable bond market
re-entry over the coming months and through 2013,” said Corrigan.
“We have taken a number of successful steps to achieve this
re-entry on a phased basis, including a long-term bond switch in
January, the sale of Treasury Bills and long-term bonds in July and the
first-ever sale of Irish amortising bonds in August. We also plan to
issue inflation-linked bonds.”
“The average interest rate of just under 6% on the recent
sales of long-term bonds and amortising bonds is higher than we would
expect to pay on an ongoing basis as we return to the market; but our
primary objective was to tackle the ‘funding cliff’ presented by some
E12 billion of bonds maturing in January 2014. Reducing that to E2.4
billion has removed a major obstacle to full market re-entry and should,
in tandem with continued progress on other fronts, help us achieve lower
yields”, he added.
Corrigan said that wider euro area uncertainties remain a risk to
achieving market re-entry but there had been a number of recent positive
developments.
“These include the agreement in principle by EU leaders to bank
recapitalisation directly by the ESM and the ECB’s announcement of an
open-ended commitment to buy sovereign bonds in the secondary market
subject to conditionality, but without claiming seniority over other
bondholders,” Corrigan added.
–London newsroom: 00 44 20 7862 7494; email:nshamim@marketnews.com
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