Final 2009 bond auction raises €1bn

The National Treasury Management Agency (NTMA) raised €1 billion today in the final bond auction of 2009.

This brings the total raised in the bond markets this year to €33.8 billion. Of this, €10.8 billion was issued through a series of nine monthly auctions, with €23 billion raised in four syndicated issues.

A further €1.4 billion in funding was raised in the small or retail debt market.

There was solid demand for the bonds. Some €200 million of the 4.0 per cent bond due to mature in 2014 was sold, while €800 million of the 5.9 per cent, 2019 bond was sold.

"Greater risk appetite generally among market investors helped in having a successful sale, but there is no doubt that international investors are feeling increasingly comfortable about buying Irish paper especially with the Government committed to delivering a tough Budget next month, and the Nama bill having passed through parliament," said Bloxham economist Alan McQuaid.

"Of course, Ireland still has to pay a higher premium over German bunds than the other Eurozone countries given its precarious public finances position. However, things are significantly better than they were back in March, and should continue to improve if the markets believe genuine progress is being made in tackling Ireland's huge budget deficit."

Allowing for a funding requirement of between €27 billion and €28 billion for 2009, the NTMA has pre-funded some of next year's requirement.

"The bottom line is that Ireland is in a very strong funding position going into next year," said Mr McQuaid.