The National Treasury Management Agency (NTMA) will hold its first auction of treasury bills in 2015 later this week. The agency will offer €500m of T-Bills with a six-month maturity on Thursday.
Late last year, the NTMA announced its intention to raise up to €15bn over the next 12 months as it resumed regular and pre-announced bond auctions.
Earlier this month, the debt agency mandated a number of its primary bond dealers to issue a new seven- year syndicated bond “in the near future” — the first step in raising the planned €15bn.
Goodbody economist Dermot O’Leary last week criticised the NTMA for being overly cautious.
While the seven-year bonds were sold at a record low yield, Mr O’Leary said the NTMA had missed an opportunity to issue debt at significantly longer maturities taking advantage of current favourable market conditions.
Citing the example of the Spanish 30-year bond which has a yield of 2.4%, the Goodbody economist said Ireland could potentially sell 30-year bonds at a yield close to 2.2%.
He also noted the favourable impact on yields as a result of the ECB’s quantitative easing programme announced last week. The Government has not held regular bond auctions since before the country was forced into the EU/IMF bailout programme in late 2010.
The NTMA last sold treasury bills in November, when it auctioned the same amount of six month bills at a yield of 0.04%. Irish Treasury Bills are zero-coupon debt instruments issued at a discounted rate and normally have maturities at issue of one to 12 months.
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