NTMA auction to raise €500m

The NTMA will tomorrow raise €500m through an auction of three-month treasury bills.

The NTMA said in a statement: “This will be the first auction of 2013 and, subject to market conditions, will be followed by two further monthly auctions in the first quarter of the year.”

The Government ended last year with €23bn in cash and raised a further €2.5bn, which means it is fully funded up to the end of 2014.

Danske Bank fixed-income dealer Owen Callan said tomorrow’s treasury bill auction is a very useful PR exercise.

The reason for issuing short-term debt is to broaden the investor base as much as possible and open up lines of communication with investors who may be too risk averse to buy longer-dated debt, he said.

In the years prior to the crisis, the NTMA raised about €8bn in treasury bills annually, with maturities up to one year.

“The NTMA is building up to raising more money through treasury bills. It has done a few €500m issues since last July, but I would imagine that the target would be €5bn in a year spread over six-, nine-, and 12-month bills,” Mr Callan said.

Fitch Ratings analyst Douglas Renwick said Ireland may be able to exit its bailout by the end of year.

“There’s a good chance Ireland might be able to regain full market access by the end of the year and exit the IMF programme without having to roll it over,” Mr Renwick told a seminar in London.

“In terms of signalling that would also be quite positive for the rest of Europe as it would demonstrate that these adjustments can actually work.”

Goldman Sachs analyst Kevin Daly issued a research note yesterday claiming Ireland would be able to exit the EU/IMF bailout programme at the end of this year, even if the Government is not successful in securing a deal on the bank debt.

Mr Callan said: “The debt talks are probablynot as important as the Government makes out. It won’t prevent Ireland exiting the bailout programme, but the failure to get a deal will probably add to the yield.”