Ireland's debt agency raised 6 billion euros on Tuesday in its largest bond sale for a decade, as the state moves to boost its finances to fund what the deputy prime minister said would be "significant deficits" caused by the coronavirus pandemic.
The National Treasury Management agency raised the funds through the syndicated sale of a new seven-year bond, which it said attracted 33 billion euros worth of demand.
The issue was priced at mid-swaps plus 32 basis points, implying a yield of around 0.23% according to Reuters calculations. Ahead of the transaction a market source said the NTMA had hoped to raise between 3 and 4 billion euros.
The issue means Ireland has raised 11 billion euros of a target for the year, set before the coronavirus pandemic, of 10 to 14 billion euros.
The NTMA has not updated that target despite a surge of government spending to help deal with the fallout from the coronavirus, that the central bank has estimated will cost at least 8 billion euros.
Last week, the NTMA said it would have one syndicated issue and two bond auctions between April and June, its busiest quarter of issuance in more than two years.
It said it was well placed to address any borrowing challenges caused by the pandemic, citing strong cash balances, investor appetite and European Central Bank measures.
Ireland mandated BNP Paribas, BofA Securities, Cantor Fitzgerald Ireland, Danske Bank, Goldman Sachs International Bank and J.P. Morgan as joint lead managers of Tuesday's sale, the National Treasury Management said.
German government bond yields rose on Tuesday with euro zone finance ministers due to meet later in the day to discuss a joint response to help member countries deal with the economic impact of the novel coronavirus.
Demand for safe-haven Bunds has softened in recent days as the number of new cases and the increase in the death toll has slowed in several countries including Italy and Spain.
Tanaiste Simon Coveney said on Tuesday he expected Ireland's economy to begin to recover from the pandemic later in the summer but warned Ireland would have to borrow a lot of money and run significant deficits for a period. (Reuters)