Brussels, 03/07/2012 (Agence Europe) - Ireland will, on Thursday 5 July, return to the short-term debt market for the first time since September 2010, the Irish Times reports on Tuesday 3 July. It is taking advantage of the confidence of investors boosted by the decision of the European Council to allow bail-out funds to lend directly to banks, thereby avoiding further debt for the countries concerned, though only once a single supervisor for eurozone banks has been put in place (see EUROPE 10645).
Ireland's National Treasury Management Agency (NTMA) is planning to offer €500 million of Treasury bills with a three-month maturity at an auction on Thursday morning. This short-term debt transaction is being viewed as the first step towards Ireland's phased re-entry to the capital markets. “The resumption of Treasury bill auctions follows an intensive engagement with investors both domestically and overseas during the past 18 months”, said NTMA chief executive John Corrigan. The resumption of issues of this kind was initially planned for the summer. It was brought forward following the decision by European leaders to relax the conditions imposed on Dublin in the €85 billion international aid programme for Ireland. This aid programme helped save the Irish banking sector which found itself in the direst of straits after the property bubble burst. The aid will cover the country's needs until the end of 2013, the European Commission says.
The interest rate on Irish 10-year debt bonds is at its lowest since November 2010, when Ireland was forced to ask for help, falling to 6.36% - more or less the same as the yield applied to long-term Spanish debt. The NTMA is looking to issue long-term debt by the end of this year or the start of next. Before then, however, it will first have to show its mettle on the short-term market. (EL/transl.rt)