Ireland will today sell its first bond through a syndicate of banks in three years as it continues a return to debt markets in a bid to become the first euro-area country to exit a bailout.
The National Treasury Management Agency will sell more of the 2017 bonds, priced to yield about 260 basis points over the mid-swaps rate, a fixed-rate market benchmark, said two people familiar with the matter, who asked not to be identified as they’re not authorized to speak about it. Barclays Plc, Danske Bank A/S, Davy, Royal Bank of Scotland Group Plc and Societe Generale SA will sell the bonds, the NTMA said yesterday.
Fiona Howard, a trader at Dublin-based Davy, a primary dealer in Irish government debt, said she anticipates a transaction size of between 1 billion euros ($1.31 billion) and 2 billion euros.
Prime Minister Enda Kenny is seeking to regain the country’s economic sovereignty and leave the international rescue program the country entered in 2010 ahead of fellow bailed-out nations Portugal and Greece. Ireland received a 67.5 billion-euro bailout in 2010.
In July, the government returned to international bond markets after almost two years with the sale of 4.2 billion euros of new debt. Yields on Ireland’s 2017 bond rose seven basis points to 3.40 percent today. A basis point is 0.01 percentage point. The five-year yield reached more than 17 percent in July 2011.
The NTMA plans to raise about 10 billion euros in the market in 2013 as it returns to syndicated bond sales and regular monthly long-term debt auctions, Chief Executive Officer John Corrigan said in November.
“I expect the auction to be very well received by both domestic and international investors,” said Ryan McGrath, a bond trader at Dublin-based Dolmen Stockbrokers. “It can also be assumed that a large proportion of the eventual size has already been lined up.”