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Dublin: 12 °C Saturday 1 November, 2014

Ireland’s cost of borrowing drops as another €500 million is raised

Today’s T-Bills auction was oversubscribed.

Image: Francisco Seco/AP/Press Association Images

THE AGENCY TASKED with managing Ireland’s debt has raised €500 million on the markets today – and seen the country’s cost of borrowing drop to its lowest post-bailout level.

The NTMA completed an auction of €500 million Treasury Bills. The three-month bonds sold at a yield, or interest rate, of 0.55 per cent.

Total bids received amounted to €2.06 billion, 4.12 times the amount on offer.

Today’s sale was the fifth time Ireland returned to the markets since the IMF/EU rescue package was granted in November 2010. When similar bills were last issued in September and October, the interest rate paid was 0.7 per cent.

This was a significant decrease on the yield of 1.8 per cent seen during an auction in July, the first since the international intervention.

Danske Markets strategist Owen Callen noted today’s auction was the best performance from the NTMA T-Bill programme to date and “represents another important step towards fully-normalised market funding” next year.

“With positive momentum and yesterday’s credit decision from Fitch, we may see some new investor names return to the Irish market in the near future,” he added.

A separate round of bond activity, where Ireland raised €4.19 billion in longer-term loans followed later that same month. NTMA is still testing the waters with these so-called T-Bills and it is unlikely the selling of debt with longer maturities will be tabled until 2013.

Read: Bank of Ireland becomes first bank to borrow without State support>

Related: Ireland to go back to the markets again>

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