Ireland looked set to sell a new 10-year bond below a yield of 1% on Wednesday in a syndicated sale a source said would probably raise between 3 and 4 billion euros, covering around a quarter of its issuance target for 2018.
The first euro zone sovereign out of the traps this year, Ireland has followed a template of coming to market with a significant syndicated issue at the start of each of the last five years.
It had received 14 billion euros worth of orders from investors shortly before books closed, lead bankers for the deal said, setting a price of 2 basis points over mid-swaps that would imply a yield of 0.943%.
The banks and brokers mandated by Ireland's debt agency were pitching the new benchmark bond on the same day that wide-ranging European Union financial market regulatory reforms known as MiFID II took effect.
Smaller euro zone states often use syndication to broaden the investor base for their bonds and compete with big countries whose debt attracts demand because of benchmark status. Using banks to find demand should also help secure more aggressive pricing and ensure liquid trading.
A market source told Reuters on Tuesday that the National Treasury Management Agency (NTMA) would seek to sell between 3 and 4 billion euros of the bond.
The agency plans to issue between 14 and 18 billion euros of long-term debt in 2018, including at least one syndicated deal.
Ireland raised over 17 billion euros on debt markets last year, facilitating early repayment of some of its loans from a 2010 international bailout while also increasing its scarce pool of debt eligible for the European Central Bank's quantitative easing stimulus programme.
The NTMA has over the last three years taken advantage of record low funding rates and an economy that has grown faster than any other in Europe to lengthen the maturity of its stock of debt.
Ireland received its second credit rating upgrade in the three months since it last tapped investors when Fitch lifted its sovereign rating to A+ in December. (Reuters)