Bid to return to short-term market

IRELAND is set to return to the short-term bond markets this year, ahead of a planned resumption of auctioning long-term debt sometime in 2013.

At the publication of its business review for 2011, yesterday, the National Treasury Management Agency (NTMA) — the body responsible for managing the national debt — said it is hoping to get back to the long-term bond markets “as early as possible” in 2013; and is aiming to use, as a springboard, a sooner return to the short-term markets — through the selling of treasury bills — before the end of 2012.

NTMA chief executive John Corrigan said the agency will “start the process of re-entry” around the middle of this year and hopes to raise billions rather than millions of euro from its sale of short-term Government debt.

However, Mr Corrigan said such moves tend to be “very much opportunistic” and dependent on fast-moving capital market moods; and on more positive moves in tackling the eurozone debt crisis.

He said the NTMA would have no hesitation in delaying its re-entry to the debt markets if it thought it could not lend at acceptable yields. “If we go back in, we have to do so in a sure-footed manner. There would be nothing worse than failing in our strategy; it would be better staying out than failing. The first transaction is crucial to ongoing success.”

He downplayed the idea that Ireland may require a second bailout, noting the country is only one year into a three-year programme and looking for a second bailout, at this time, “would be a bit like throwing in the towel when you hear the half-time whistle”.

He said while Ireland’s borrowing costs remain elevated, they have come down from 8.3% to 7.5%, and are well below those of other periphery member states.

That, according to the NTMA, has been prompted by US bond investors’ interest in Irish debt and the agency is in the midst of an investor relations roadshow.

“Investors recognise that Ireland has a flexible open economy and is fully engaged in taking action to deal with its problems on the basis of the measures set out in the EU/IMF programme. However, a resolution of the wider eurozone sovereign debt and banking crisis is critical to restoring investor confidence and positioning the NTMA for a return to the markets.”