€7.5m fees for NTMA bond lead managers

Finance Minister Michael Noonan has confirmed that six joint lead managers of the NTMA’s recent 10-year €5bn bond sale are toreceive €7.7m in fees.

€7.5m fees for NTMA bond lead managers

In a written Dáil response to Sinn Féin’s Pearse Doherty, Mr Noonan said that €8.75m is to be paid in fees to 17 primary dealers in government bonds in connection with the sale.

Mr Noonan said 89%, or €7.7m, of this was paid to six of the primary dealers: Barclays, Danske Bank, Davy, Goldman Sachs International, HSBC, and Nomura, which acted as joint lead managers having significant roles in the new 10-year bond sale.

Mr Noonan said that the remaining 11% is to be paid to 11 other primary dealers who were co-leads in the syndicate with lesser roles.

“It is important to emphasise that the team of primary dealers, chosen to manage the transaction, assisted in building a strong order book, with some 400 investors submitting bids, including fund managers, banks, pension funds, and insurance companies,” Mr Noonan said.

“The total bids received amounted to some €13bn. This clearly demonstrates that Ireland has regained access to the international debt markets.

“The size of the order book and the broad investor interest is a strong signal of confidence in Ireland.”

The NTMA, headed up by chief executive John Corrigan, has been issuing bonds with lengthening maturities since July, when the first bonds since the bailout were placed with investors.

The recent sale was the NTMA’s first new 10-year issuance since Jan 2010.

On the role of primary dealers, Mr Noonan said: “The NTMA recognises 17 primary dealers in Irish Government bonds, all of which are members of, and regulated by, the Irish Stock Exchange.

“Primary dealers have obligations with respect to market-making in Irish government bonds, an essential role in the provision of liquidity to investors.

“They also advise the NTMA with respect to issuance and assist with the marketing process as well as producing research designed to assist investors.

“The NTMA has advised that the fee payable to the syndicate of banks was 0.175% of the nominal debt issued.

“This is the standard fee for the issue of bonds of a 10-year maturity by syndication in the euro area sovereign bond market and is also, for example, the fee paid by the European Investment Bank, which has an AAA credit rating, for its 10-year bond issuance.”

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