NTMA to release schedule of bond issues

The NTMA will release a schedule of bond issues later this year as part of the country’s efforts to make a full return to the markets prior to the exit from the EU/IMF bailout programme in November, according to the agency’s chief economist Rossa White.

The NTMA made its return to the markets last July for the first time since before the bailout in Nov 2010.

It made a series of three- month treasury bill issues before a syndicated tap in August. Since then it has issued a number of longer dated bonds, including a 10-year bond in March.

Bond yields are now trading at pre-crisis levels, although the NTMA has so far not released a calendar of issuances.

Mr White was speaking at the Bank of Ireland Business Conference in Dublin yesterday.

The key to regaining market confidence was the stress tests of the banking system in Mar 2011, Mr White told the conference.

The tests were independently conducted by the consultancy firm Blackrock International.

The three banks were ordered to come up with €24bn in extra capital to absorb mortgage and other loan losses.

The stress tests gained credibility among investors and removed the uncertainty of potential losses lurking in the banking system.

The NTMA began the process of re-engaging with investors over the course of 2011, said Mr White. The strategy was to under promise and over deliver on meeting targets agreed with the troika.

The reduction on the interest rate on Ireland’s bailout loans in the summer of 2011 was one of the key factors in convincing investors the national debt was heading towards sustainable levels, he said.

There has also been a significant improvement in the economy’s competitiveness over the past three years, he noted.

Unit labour costs have come down, the exchange rate on a trade weighted basis is down, and the cost base, which was once 25% above the EU average, is now just under 10% above the average.