NTMA to hold further auctions

The National Treasury Management Agency (NTMA) has today confirmed plans to hold up to four additional short-term treasury bills auctions between now and the end of the year.

The agency's chief executive John Corrigan said the auction would be similar to that held earlier this month when €500 million was raised in its first sale of treasury bills since before the State sought a bailout.

That auction met its target, and had a yield of 1.8 per cent and a bid to cover ratio of 2.8.

Speaking at the publication of the agency's annual report in Dublin this morning, Mr Corrigan also said it intends to issue its first conventional medium to long-term bond since September 2010 and to diversify its sources of funding through the first Irish Sovereign issues of amortising and inflation-linked bonds.

“For some time now the NTMA’s plan has been to carefully and deliberately re-engage with the debt markets in a phased manner, “said Mr Corrigan.

“That process is now underway and will continue over the coming months as we increase the size and maturity of treasury bill issuance and introduce two new types of funding instrument specifically tailored to the needs of the domestic pensions industry. Market conditions permitting, the NTMA also plans to issue a conventional medium to long-term bond.”

Setting out the agency's 'road map' for re-entering international bond markets, Mr Corrigan reiterated that re-entry was dependent on a number of factors, not least the ongoing euro zone crisis.

Mr Corrigan said the agency was working with the Department of Finance on legislative proposals for presentation to Government to put NewERA on a statutory basis and to refocus the National Pensions Reserve Fund on the domestic economy to enable investment in projects and in infrastructure, including public-private partnerships, financing for SMEs and venture capital.

NewERA, is an agency established by the Government last year to advise on the sale of State assets.

“The unifying theme behind these proposals is the making of investments on a fully commercial basis that will generate economic activity and employment," said Mr Corrigan.

"The aim is to use NPRF assets both directly and as a catalyst for attracting additional third-party capital and also to leverage the commercial expertise and networks available to the NTMA across its NewERA, NPRF and National Development Finance Agency (NDFA) functions to drive much needed investment in the domestic economy,” he added.

The NTMA said the National Pensions Reserve Fund earned a return of 2.1 per cent in 2011, once its government-ordered investments in AIB and Bank of Ireland, are excluded.

The fund earned a return of 3.1 per cent in the first six months of 2012, valuing it at €5.8 billion. The value of its investments in the two pillar banks was valued at €8.1 billion.

Since the fund's inception in 2001 to the end of June 2012, the NPRF has delivered an annualised return of 3.5 per cent per annum, the NTMA said.

The agency also said borrowings under the EU-ECB-IMF bailout programme to the end of May 2012 amounted to €49.5 billion with loans from EU sources amounting to €32.7 billion and IMF loans totalling €16.8 billion.