Wednesday, March 13 07:49:49
Ireland is to issue its first new benchmark 10-year bond since its EU/IMF bailout in the "near future", its debt agency said on Tuesday, a landmark on its route to becoming the first bailed-out euro zone country return to full market funding.
The National Treasury Management Agency (NTMA), which began borrowing again from capital markets last year, had earmarked a new benchmark issue as its most significant step towards a full market return ahead of regular bond auctions later this year.
One industry source said the books were expected to open on Wednesday. The NTMA made a similar pre-announcement in January before it opened its five-year syndicated deal the next day.
The new bond, to mature in March 2023, will be Ireland's first benchmark bond since soaring yields forced it to take refuge in a 85-billion euro ($110 billion) bailout in 2010.
The notes will be issued through a syndicated transaction subject to market conditions, with details to be announced in "due course", the NTMA said in a statement.
One industry source said the debt agency was expected to issue a minimum of 2.5 billion euros. A second industry source said it would likely be between 2 and 3 billion euros.
"It will be significantly well oversubscribed. There is a lot of demand that had been waiting for the bond issuance for the last number of weeks," said Ryan McGrath, a bond dealer at Dolmen Securities, who said he expected to see yields somewhere between 4.25 percent and 4.40 percent.
The head of the NTMA said regular auctions would probably be enough to see it qualify for the ECB's Outright Monetary Transactions (OMT), a scheme the government has said it would like to apply for in due course.
Dublin wants to have backstops like potentially unlimited ECB bond purchases and the availability of a conditional line of credit from official lenders in place as it exits its bailout to make investors more comfortable to lend it money. ( C ) Reuters