Ireland considers US dollar bond

Ireland is considering selling a US dollar-denominated bond to open another funding avenue in its return to international markets, according to sources.

The NTMA may issue the securities within two months, subject to Irish debt maintaining recent gains, according to one of the people, who asked not to be named.

The bond may have a maturity of at least five years and will be sold through a syndicate of banks, the person said.

Officials at the NTMA declined to comment.

“A dollar issue would make a lot of sense from the point of view of attracting non-euro investors who either do not want the costs of hedging out a euro-denominated bond, or who remain cautious as to the long-term future of the eurozone,” said Owen Callan, an analyst at Danske Bank in Dublin, which is a primary dealer in government debt.

“Additionally, US investor sentiment towards Irish risk assets has been exceptionally positive in recent months, so we would expect solid demand for such an issue.”

In July, Ireland returned to international credit markets for the first time in almost two years. The Government stepped out of bond markets and sought a bailout in Nov 2010 as the banking woes threatened to push it into bankruptcy.

The NTMA needs to secure US regulatory clearance to ensure that so-called qualified institutional investors there can trade the securities, according to the two people. This may take four to five weeks, one of the people said.

Earlier this month NTMA chief executive John Corrigan said the agency can now be “a bit more choosey” about the timing of future issuance.

The NTMA has also made a commitment to issue an inflation-linked bond, aimed at domestic pension funds, though the “timing of that is something we have to reflect on”, he said.