The National Treasury Management Agency saw strong demand for its first ever 30-year bond today.
The NTMA is trying to lock in record low interest rates that have
followed the European Central Bank's announcement of a €1 trillion
quantitative easing programme.
Managers saw more than €11 billion of demand for the benchmark issue,
far in excess of the €2 billion deal size that market participants said
would be typical of a benchmark 30-year issue.
Lead managers set the guidance at 90 basis points over mid-swaps,
implying a yield of just below 2.1%. The transaction was expected to be
priced later today.
Like most of their euro zone peers, Irish bond yields have fallen
sharply in the past year, aided by a rebound in the economy, which
probably grew faster than any other country in the European Union in
2014.
The Central Bank
today raised its forecast for 2015 economic growth to 3.7% from 3.4%,
on the back of stronger consumer and investment spending.
Last
month, the European Central Bank said its quantitative easing (QE)
programme would involve the purchase of sovereign bonds with maturities
of between two and 30 years.
The NTMA last month sold €4 billion in a syndicated seven-year sale,
out of planned issuance of between €12-15 billion of long-term bonds
this year.
The agency fully pre-funded for 2015 last year. It plans this year to
cover funding requirements for 2016 and to refinance bailout loans from
the International Monetary Fund.
Barclays, Credit Agricole, Danske Bank, Davy and Royal Bank of
Scotland have been appointed as joint lead managers for the transaction.
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