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THE NATIONAL TREASURY Management Agency will today return to the international financial markets for the first time since Ireland was bailed out.
The €500million debt auction comes as interest rates on Irish government bonds continued to fall. Nine-year notes are now at 6.26 per cent, their lowest level since the IMF/EU bailout in November 2010.
Today’s auction will consist of €500million in three-month Treasury Bills, or ‘T-Bills’. These are different from bonds, in that they run over a much shorter term, and do not pay interest during their lifetime.
Instead, the Government must pay the full value when the bill reaches maturity. The bills are sold at a discount, meaning that the ‘interest’ value for investors is effectively the difference between the discounted purchase price and the full price repaid at maturity.
The auction will last an hour, and will close at 10.30am.
There is cautious optimism among commentators over the auction.
“It’s positive news, Ireland has done relatively well in its reform programme,” Lyn Graham-Taylor of Rabobank told Bloomberg, adding that the auction could be a sign that Ireland is on the way to exiting the bailout.
However, Conall Mac Coille of Davy Stockbrokers sounded a cautious note, pointing out that both Greece and Portugal have auctioned T-bills since their bailouts.
He said the auction was a “significant moment in Ireland’s potential re-engagement with markets”, but added:
Even if Treasury bill issuance is expanded through 2012, it will pale against the €13bn of market funding in 2013 that the current EU/IMF package of funding support envisages. So Ireland’s longer-term funding prospects remain reliant on the EU’s commitment.
Eoin Callan of Danske Bank told RTÉ’s Morning Ireland that the auction is expected to be two to three times oversubscribed by potential bidders.
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In an unusual departure from the educational, enlightening and incredibly intelligent comments above – I’m genuinely looking forward to hearing how the sale goes.
In just over 70 minutes we’ll have a definitive answer as to how the real world sees Ireland’s short/immediate term prospects – at the very least, it’ll hopefully give us a clear sign for how potential 6/12 month auctions may go.
So when ur in a hole stop digging. Who is getting the borrowed money what’s it for?? The bond holders. A vicious circle but talented spin to call this a good thing is truly amazing
Going once, going twice, gone completely. Woof!
Borrowing internationally to pay for day to day expenditure while our service demanding population spend most of their income and benefit on imports and foreign holidays. ??????
Borrowing internationally to pay for day to day expenditure while our service demanding population spend most of their income and benefit on imports and foreign holidays. ??????
With barking dogs and Reds under the beds trying to pull the house down don’t we have pretty friends?
Another smoke and mirrors exercise like the promissory note slight of hand earlier in the year. An empty exercise designed to generate a faux positive headline that will end up costing the taxpayer more in the long run. There will be much back slapping for the cameras while in the background more of our money is shovelled to the wealthy.
I think the sleight of hand came from your fellow Socialist Mr Higgins who thinks we should borrow more to pay his mileage and overnight expenses while he travels the country telling people not to pay their lawfully charged taxes!
Yes yes Mark, its not the billions handed out by fine gael, the junkets to Rio, the breaches of salary caps etc. that is running up the meter, its Joe travelling around the country in his car or on public transport thats the issue.
Incidentally, before you accuse a somebody of sleight of hand, shouldn’t you wait for the official verdict on the matter?
Oh, and love the stats from your twitter account thats been around since you started posting here:
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@mark Joe Higgins stayed in b&b ‘s I wonder when was the last time a Fine Gael td stayed in anything other than a 4star hotel while traveling the country. Fine gael are not commenting on Joe Higgins expenses why , Brian Hayes track recorf to name but one reason. Its a weak attack on Higgins which will fade as soon as people start digging up Fine Gael parties expences just as the Mick wallace tax issue faded as soon as people brought up the fact that Fine Gael were guilty of tax dodging also.
These T-bills are the best gamble any private group could be involved in, of course the government will raise the 500mil, buy at a discount sell in three months for the full value. Everybody knows these will be picked up , watch enda come out later to-day and sat confidence is building in Ireland, its a ruse I hope it works but the markets know whats going on here doubt they will be impressed.
Not a return to the markets folks, just propaganda. See Gurdiev 2days ago http://trueeconomics.blogspot.ie/2012/07/372012-curb-your-enthusiasms.html?m=1
It’s more of a test to see if we can return to the market. T-bills are perfect because of the short maturity time.
These T-bills are being bought by none other than NAMA so we are to all intents and purposes buying our own debt!!
Ah yes a sign of confidence in Ireland from the markets!!
And everybody knows this, so whats the point no one is being fooled by this unless the guys that recomended this to noonan have a vested interest and will be reaping the profit themselves in three months.
Should be a doddle. There’s no risk in Ireland, as the Irish are willing to do *anything* to borrow money. Even sell their children.
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