NTMA to attempt bond swap repeat

The National Treasury Management Agency (NTMA) is likely to attempt to repeat this week’s successful bond swap in a bid to shave even more off its scheduled repayments for 2014.

A spokesperson for the agency reiterated yesterday it was “very pleased” with Wednesday’s transaction — despite the fact that it was Irish banks, rather than foreign investors, that dominated the offer — and would continue to consider similar opportunities in the future.

This week’s move saw the NTMA lessen the amount of debt it was due to repay to bondholders in 2014 by 30%, or €3.53 billion; effectively spreading the €12bn which was payable in that year into the previously debt free 2015. Given the healthier than anticipated result, it now seems likely that the agency will try to improve its situation further.

Analysts yesterday welcomed the NTMA’s efforts, but stressed it was not cause for getting carried away.

Barry Nangle of Davy Stockbrokers told the Bloomberg news service that Irish banks had “dominated” Wednesday’s bond extension offer, although he admitted there had been “other participants” also.

Davy’s chief economist Conall MacCoille had earlier said that it was “reasonable to assume that Irish banks played a key part in the high take-up”.

“That said, the operation was still an encouraging sign that Ireland may be able to return to bond markets sooner than had previously been thought,” he added.

Goodbody Stockbrokers chief economist Dermot O’Leary called it “a worthwhile and sensible manoeuvre”, which will maintain the more favourable sentiment towards Ireland.

He noted, however, that Ireland’s debt burden is ultimately continuing “to balloon upwards” and the real challenge will come “when investors are asked to take on additional exposure on a medium-term basis to the Irish sovereign”.