Ireland May Put ‘Toe’ in Debt Market With Sale of Treasury Bills

Ireland may seek to put its “toe” back in the debt markets in the second half of 2012 with a sale of Treasury bills, said John Corrigan, chief executive officer of the National Treasury Management Agency.

U.S. investors including hedge funds will probably be the first buyers as Ireland seeks to return to bond markets after a roadshow by the agency this year generated “huge interest,” according to Corrigan.

Ireland sought an international bailout last year as investors shunned government and bank debt after the economy shrank about 15 percent since 2007. While the NTMA said the state is fully funded through 2013, the government has said it wants to test the market next year.

“International investors acknowledge the strong progress Ireland is making in tackling its domestic problems, but the stresses in the euro zone overshadow everything else,” Corrigan said at a briefing today in Dublin.

The yield on 10-year Irish bonds has climbed 343 basis points to 12.84 percent since Nov. 26, two days before the European Union and the International Monetary Fund signed off on the nation’s 85 billion-euro ($122 billion) bailout.

European leaders arrived in Brussels seeking solutions for the 21-month-old sovereign-debt crisis as Luxembourg Prime Minister Jean-Claude Juncker said Greece may not be able to avoid a default.

Kevin Cardiff, head of the Irish Finance Ministry, said the government is focusing on not having to default on its debt.

“What we are planning for and working on is the government’s policy, which is to ensure that we don’t have to default,” he told lawmakers in Dublin today at a parliamentary committee. “All our focus is not being at the default stage, and that is frankly a much more likely scenario.”

To contact the reporter on this story: Dara Doyle in Dublin at ddoyle1@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net

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