Ireland’s state-backed banks issued fewer bonds in the past three weeks under a program to generate collateral that’s eligible for European Central Bank funding.
Irish banks started issuing three-month, government-guaranteed notes last January that they kept to use as loan security instead of selling to investors. The country was forced to accept an international bailout 15 months ago as the end of a decade-long property boom locked its banks out of public debt markets.
Bank of Ireland Plc and Irish Life & Permanent Plc issued 13 billion euros ($17 billion) of self-held, or own-use, bonds since Jan. 19, according to the National Treasury Management Agency in Dublin. The issues refinance maturing notes and don’t represent an increase in funding, spokesmen for both lenders said. Allied Irish Bank Plc said it didn’t issue any securities.
The banks’ issuance of self-held bonds declined 26 percent from the last round of deals in October and November, according to NTMA data. The notes are “eligible collateral for euro-system market operations once they are guaranteed by the government,” according to the Central Bank of Ireland.
Irish banks’ reliance on ECB funding declined 4.3 percent to 67.1 billion euros in the final three months of last year, the lowest level since August 2010.