State achieves more than 90% of minimum bond sale target for year

The National Treasury Management Agency has fulfilled more than 90 per cent of its minimum full-year bond sales target after returning to the market for the first time since the Government was formed.

The debt agency raised €750 million on Thursday morning from the sale of bonds which mature in 2022. The notes were priced to carry a market interest rate, or yield, of 0.157 per cent, which was slightly lower than the 0.186 per cent rate at which similar bonds were trading in the market before the bond auction closed at 10 am in Dublin.

The rate was also down from the 0.81 per cent yield at which the NTMA auctioned 2022 bonds in May last year.

"Investors looked beyond the looming Brexit referendum, focusing instead on Ireland's strong macro-economic story," said Ryan McGrath, head of fixed-income strategy at Cantor Fitzgerald in Ireland.

Further issuance

“The NTMA have now concluded €5.5 billion in funding out of a target range of €6 billion - €10 billion, we do not anticipate any further bond issuance until September or October.”

Thursday’s auction marks the third such sale by the NTMA since the start of the year and first since the formation last week of a new Fine Gael-led minority government, some 10 weeks after inconclusive elections in February.

Demand for the bonds sold in the latest auction outstripped supply by 2.6 times, according to the NTMA.

The focus now turns to ratings agency Moody's Invesors Service, which is due to issue an update on its view on Ireland's creditworthiness after the markets close on Friday. The agency rates Ireland's debt at Baa3, while its two main rivals, Standard & Poor's and Fitch, have A ratings on the country.