US fund ‘aggressively buying’ Irish Government debt

DAN Fuss, who as vice chairman of Loomis Sayles helps oversee funds worth $150 billion (€107bn), said the firm has been buying Irish Government debt aggressively in recent weeks for its attractive yield and “very decent” credit quality.

“We have a completely different view of Irish debt than the rest of the world,” Mr Fuss said. “The bonds have been and continue to be cheap. Their yield is attractive relative to the view expressed in the market on Ireland’s credit quality.”

Mr Fuss said the US fund manager has been a buyer in the secondary market and took part in Ireland’s €1.5bn debt auction.

In total, Loomis holds roughly $1.5bn of Irish Government debt. Last week, Fitch Ratings downgraded Ireland’s credit rating to A-plus from AA-minus and put it on a negative outlook, pointing to the bigger-than-expected cost of cleaning up the banks and uncertainty over the economy.

The flurry of negative headlines spiralled after Moody’s said it, too, might downgrade Ireland and drove up borrowing costs, putting further pressure on a Government saddled with a debt pile set to hit €155bn this year.

Ireland’s recent bond auction met with solid demand, although at a higher price. The sale followed Greek and Spanish T-bill auctions, with the Greek offering attracting hefty demand.