NTMA auction raises €500m

The National Treasury Management Agency (NTMA) successfully tapped the markets for a further €500m in three-month treasury bills yesterday.

The auction was 3.6 times oversubscribed at €1.8bn in total bids received. The annualised yields on the issue was 0.7%.

Dublin-based Owen Callan, senior dealer at Danske Markets, said, “This issuance brings to €14.34bn total issuance from the NTMA this year and provides the agency with an enormous cash buffer of approximately €25bn, when coupled with its commercial paper programme.

“This effectively prefunds most of the Jan 2014 bond redemption — which had previously been considered a huge hurdle for Ireland to overcome.

“The bulk of today’s buying was from international, mainly continental European investors — this will certainly be seen as a welcome boost in the context of Ireland’s position at the EU summit today, and will further highlight our progress, particularly when compared with periphery member states.”

Mr Callan says the NTMA should look to issue six and nine-month treasury bills before the end of the year.

The NTMA went back into the private markets for the first time in two years in July. A market source claims that Ireland’s positive market performance during the summer stemmed from comments made at the Jun 29 EU Summit that Ireland would secure a deal on bank debt. However, there is now uncertainty over what type of restructuring deal Ireland will be able to negotiate.