New 10-year bond

The NTMA release on the sale of a March 2023 government bond is here.

14 replies on “New 10-year bond”

Odd that no-one has deemed it worth the effort to comment on this relatively favourable outcome.

The NTMA has done a very good job of marketing Irish bonds over the last year or so. I think their timing in the lead up to getting this benchmark away into a currently, particularly high level of general, global, investor confidence has been spot on.

A few weeks ago there was the ‘deal’ on the pro notes which was, as expected, helpful in short term (and maybe medium term, but we don’t know) cash flow terms, but removed any debate there was in some quarters about them being pretend obligations. There was no transformational debt write off.

There is currently, in the market, no real indication there will be a transformational ESM retrospective recap of the Irish banks. The ESM is not supposed to make a loss. Core EZ politicians insist any ESM investment should be guaranteed by the sovereign.

All this, and no shortage of investor confidence in Ireland’s willingness or ability to service existing and new sovereign debt.

You can’t swing a cat at the moment without walloping a confident investor.

Look at the lag before this thread got opened.

Consider the number and tone of comments.

Is this the fabled “Capitulation of the Bears”?!

On this thread the Caputulometer currently stands at 100%. Eeek!

“The NTMA has done a very good job of marketing Irish bonds over the last year or so.”.
Agreed. Credit where credit is due. Even the 18% Irish buyers seems to be a bigger % than normal.

How does it affect the cash balance at the end of 2013 and 2014?

But lets remember that the ability to borrow money at somewhat reasonable rate is not necessarily an indicator of rude financial health.

Portugal:
‘Government promotes debt sale in Europe’
14 March 2013 Presseurop Jornal de Negócios

The Government will start a “roadshow” next week aiming to promote trade in its national public debt and pave the way for a debt issue of 10-year bonds, to try to copy Ireland’s March 13 success, in which it raised €5bn through bond sales.

No date has yet been scheduled for the bond issue and the goal is to convince investors that it is worth buying Portuguese debt.

http://www.presseurop.eu/en/content/news-brief/3536581-government-promotes-debt-sale-europe

Daddy: I’ve got some great news kids
Kids: What daddy?
Daddy: well you know the way we borrowed loads of money that we can’t afford to pay back..?
Kids: Yes Daddy
Daddy: And you know the way we’ll have to stop paying for school books and clothes to pay that money back….
Kids: yes daddy
Daddy: And you know the way we don’t go to the dentist any more so that we can pay that money back..
Kids: Yes Daddy..
Daddy: Well kids….
Kids:..
Daddy: I’ve just borrowed some more money….

NTMA good job my ar*e – we can’t afford even this interest rate.

Ireland is Europes first bankocracy – wake up

Apparently the 9 year bond is taking the news very badly. She had been plucked from obscurity and even made it into lex but it is back to the shadows now and it must be hard now that the 10 year has been let out of the hospital with that whiplash apparently healed.

From http://www.faz.net/aktuell/finanzen/anleihen-zinsen/rueckkehr-an-kapitalmarkt-irland-feiert-erfolg-mit-einer-neuen-zehnjaehrigen-anleihe-12113633.html

Ireland on Wednesday issued the first time in three years, a ten-year bond. Dublin has it surprised the capital markets with both the extent and with the favorable return on the bond. For the island republic, the issue was a milestone on the way to get to the end of the year can independently finance in the capital markets.

Demand for the bonds was on Wednesday with more than 12 billion euros more than the 5 billion euros, which commenced at the Dublin market. The size of the offering was nearly twice as large as had been expected by investors. The new bond rentierte on Wednesday at about 4.15 percent, which is below comparable government bonds of Italy and Spain. At the height of the crisis in Ireland in the summer of 2011, the yield on long-term Irish bonds located 14 to 16 percent and the. Of two-year securities at 21 percent

Success is important for the end of the rescue program
Given the political battles in Italy had its issue of € 3.3 billion three-year securities at 2.48 percent again offer a higher yield than in February. Spain announced emissions for this Thursday. Ireland, with its emission propped on Wednesday most of its long-term financing in the capital market this year. In January, Dublin had already issued a five-year loan of 2.5 billion euros. The financing requirements, the Ireland should cover this year is, in total about 10 billion euros.

http://www.faz.net/aktuell/finanzen/anleihen-zinsen/rueckkehr-an-kapitalmarkt-irland-feiert-erfolg-mit-einer-neuen-zehnjaehrigen-anleihe-12113633.html?selectedTab=article&offset=0&action=piav&articleCid=1.2113633

he success of the emissions is an important requirement for Ireland to leave the rescue program. The next step for Ireland would be regular, monthly capital raisings in the market. This would be a prerequisite to obtain the conditions under a precautionary financing commitment under the OMT program of the European Central Bank (ECB). Requirements imposed by the Troika targets of budgetary consolidation and reforms Dublin has all met. Market observers as the underwriter Barclays, which was involved in the Irish issue on Wednesday, expect that Ireland will apply after the end of the rescue program, a precautionary aid commitment as part of the OMT program. Ireland would arise then the further observation of the Troika, would have in an emergency, but the backing of the ECB when it has to make the transition from the program country to independence.

Perhaps more time for repayment
It is expected that the rating agencies will react positively to the issue on Wednesday. Standard & Poor’s put Ireland’s outlook in February, up from negative to positive. Moody’s has placed a negative outlook and Irish bonds in the highest category of “junk bonds”.

Ireland had been overwhelmed by relatively small state of collapse of its disproportionately large banks, as they collapsed after the bursting of the housing bubble. Dublin pumped capital of 40 percent of its gross domestic product in the Irish banks, especially in the former Anglo Irish Bank. Then deprived investors of the heavily indebted country. At the height of the debt crisis of confidence and forced Sun in late 2010 a rescue Ireland with an aid package of 85 billion euros

Dublin may IOUs in exchange bonds
Ireland had been eliminated from the “rescue” of Anglo Irish, on the advice of some governments and the European Central Bank on it to let mithaften bondholders and depositors of Anglo Irish in order to escalate the liquidity crisis in the banking industry does not continue. Therefore Dublin has now admitted in February to exchange the outstanding notes for the bank bailout of 25 billion euros in long-term bonds. Dublin also has now promised to get potentially more time for the repayment of debt from the bailout.

The average yield on Irish government debt currently stands at just under 4 percent with an average duration after the promissory note exchange of some 10 years. In this and next year, the debt ratio is expected to rise to 122.6 percent ultimately the GDP and then decline.

Nobody does small countries better than Frankfurter Allgemeine Zeitung. The Google translate is a bit stilted but still readable.

The table and graph did not drag and drop but it is in middle of the link.

@Mickey Hickey

Surprising that the astute Frankfurter Allgemeine Zeitung did not comment on the strange case of ‘The Irish earning/borrowing 30 Billion, then paying it to themselves, whereupon a match is lit and before one can say OneTwoThreeWhoosh the entire 30 Billion is gone forever’ solely to satisfy the Germanic illusion on the finite nature of money!

Mus’ be a mystery? One magnificent misery of a monstrous mystery.

@David O’D
Back in the day when the phrase not worth the paper it is printed came into vogue and the Austrian economists started to have conniption fits. People must have thought that the world was going to hell in a hand basket.

Today the store of wealth is represented by a few hundred bits on multi gigabit hard drives. It is just as easy to key in 300 billion as it is to key in 30 or 3. Gold is down 16% in the past year and mining stocks are down even more. Clearly people have faith in wealth stored on hard drives.

Me blessed sainted grandmother who did not trust banks or governments kept Sovereigns (sometimes called Guineas) in a small leather purse as insurance against the next famine, invasion, reoccupation. Her offspring are far more complacent and put their store in banks and governments. The poor woman must be spinning in her grave. The American folk singer Phil Ochs who committed suicide in the sixties had a song called or including “The times they are a changing”, apt for the times we are in.

@David O’D

FAZ tends to understate and the translation is too literal to get the colloquial wit.

“Dublin may IOUs in exchange bonds
Ireland had been eliminated from the “rescue” of Anglo Irish, on the advice of some governments and the European Central Bank on it to let mithaften bondholders and depositors of Anglo Irish in order to escalate the liquidity crisis in the banking industry does not continue. Therefore Dublin has now admitted in February to exchange the outstanding notes for the bank bailout of 25 billion euros in long-term bonds. Dublin also has now promised to get potentially more time for the repayment of debt from the bailout.

A mithaftender is “jointly liable party”, jointly and severally one of the most useful phrases in the English language.

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