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Roundup-Ireland does not need bond deal

Wednesday, September 12 08:30:08

The Minister for Finance has said he does not expect the Government to avail of the European Central Bank's new bond-buying programme before the end of the EU-ECB-IMF bailout, and only after that in an emergency. Michael Noonan said that the State's return to the borrowing markets was progressing well and that the ECB's help would not be required if a deal was reached with the EU authorities on a deal to reduce the burden of the bank debt.

"Our assumption is that Ireland could access it the same as anyone else if needed, but we're not planning to access it," he said. "We think we are doing very well and if we got a deal on the debt we'd be back in the markets anyway without that assistance." The Minister was speaking to the Reuters news agency at the Fine Gael parliamentary party meeting in Westport as the National Treasury Management Agency (NTMA) announced plans for a second auction of treasury bonds since the State sought a bailout.

It will seek to raise E500 million on debt maturing in December in an auction tomorrow in a further step for the State towards full access to the markets. The State last raised E500 million on three-month bills in July at a rate of 1.8 per cent in a sale that was 2.8 times oversubscribed. The NTMA said then that up to four more bill auctions may be held before the end of the year. "Despite being what people saw as a very small positive, the auction of treasury bills in July significantly repriced short-term government debt maturing in the second quarter of next year," said Cathal O'Leary, head of fixed income at NCB Stockbrokers in Dublin.

Two-year Irish government bonds have fallen to 2.2 per cent from 4.8 per cent last July. The decision of euro zone leaders to seek to ease the bank bailout costs on the State at a summit in June has driven bond yields lower. Mr Noonan said yesterday that the Government had not decided whether to seek to refinance the E28 billion of State promissory notes used to pay for the cost of Anglo Irish Bank and Irish Nationwide with long-term government bonds or euro bailout funds. The Irish Times

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Property developer Patrick McKillen faces legal bills that could reach £20 million (E25 million) following his High Court defeat in London in his battle to win control of three luxury London hotels. Mr McKillen was refused leave to appeal yesterday by Mr Justice David Richards, although he is to seek permission directly from the court of appeal within three weeks. The case centred on Mr McKillen's bid to win majority control over the Berkeley, the Connaught and Claridge's hotels - three of London's most famous hotels.

In August, Mr Justice Richards rejected his claims that brothers David and Frederick Barclay had improperly won control over financier Derek Quinlan's shares in the hotels. For now, the Belfast-born developer must pay over £6 million of the legal bill within 42 days, although Mr McKillen's lawyer had sought that he should not pay anything in advance to some opponents. Mr McKillen's spokesman said last night he would pay the bill "from his own resources, so that there is no ambiguity about that".

Despite being determined to press ahead with an appeal, Mr McKillen's lawyer, Richard Hill QC, told the high court that "we accept that we lost . . . resoundingly". Lawyers for the secretive Barclay brothers said their costs alone ran to £7.6 million, while Mr McKillen's team said his bill amounted to £6 million. Lawyers for Mr Quinlan - who formed Coroin Ltd in 2004 deal to buy the three hotels, along with the since sold-off Savoy - said his bills ran to £4.6 million. Coroin - the holding company that owns the hotels and in which Mr McKillen still remains a significant shareholder, if a minority one - is claiming £775,000. The Irish Times

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The number of people employed by the award-winning Dublin-based Brown Bag Films has more than doubled to 125 in the past two years. The animation studio yesterday confirmed numbers have grown to 125 from the 59 employed at the end of 2010 - an increase of 111 per cent. New accounts filed by Brown Bag Films Ltd with the Companies Office show that pretax profits declined by 75 per cent to E93,709 for the eight-month period to the end of December 2010 from E386,560 in the prior 12-month period.

Revenues in the eight-month period declined by 33 cent to E3 million, compared to E4.5 million in the 12 months to the end of April 2010. The firm's most recent Disney series, and the top-rated pre-school show in the US, Doc McStuffins, attracted almost five million viewers and will air here this autumn. The firm is currently in full production for a second season of the Bafta-nominated Octonauts for the BBC and a second season of Doc McStuffins, while the Happy Hugglemonsters will first air for Disney Junior in over 150 countries this autumn.

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Ryanair has issued nearly $600m (E466m) of debt by capitalising on low-interest bonds backed by a US government bank to help fund aircraft purchases from Boeing. The US-based Export-Import Bank (Ex-Im) has long offered to guarantee bank loans to finance overseas buyers' purchases of American-made products and services ranging from bulldozers to engineering work to jetliners.

After credit markets froze, the Washington agency agreed to back bonds issued by airlines to refinance loans. In May, Ex-Im eased rules so airlines could raise the money for planes directly from the bond market with debt guaranteed by the bank. The notes are called "pre-funded," because airlines can now sell them before taking delivery of their aircraft.

Ryanair has issued $597m of the debt. On September 5, the carrier sold $194.3m of 1.741pc notes due in October 2024. The carrier is due to receive delivery early next year of the final stage of what was a record aircraft order it made with Boeing a number of years ago. Ryanair currently has no other aircraft on order. Interest rates at record lows and the relaxation of Ex-Im Bank rules are making it easier for non-US airlines to access capital markets even as private-sector lending becomes more expensive and difficult to obtain. The Irish Independent