THE STATE’S debt manager, the National Treasury Management Agency (NTMA), will seek to raise a further €750 million to €1 billion from the sale of two Government bonds in the latest monthly bond auction on Tuesday.
The NTMA will sell bonds maturing in 2012 and 2016 in the fourth bond auction this year.
The Government has raised €13.4 billion from bond sales this year, amounting to just over half the State’s record borrowing requirement this year to fund the budget deficit and public finances.
Some €3.4 billion has been raised through the series of monthly bond auctions, which began in March. The NTMA said that it would make an announcement at the end of this month about plans for further auctions in the third quarter of the year.
The NTMA raised €6 billion and €4 billion in two syndicated bond deals earlier this year where the securities are placed with investors. The agency said last month that it was likely to issue a third syndicated bond later this year in addition to the regular auctions given the volume of funds that needed to be borrowed this year.
The auction next Tuesday will be the first since credit ratings agency Standard Poor’s reduced the State’s rating last Monday for the second time in three months and signalled a likely further cut.
The cost of the borrowing will be closely watched to assess the effect of the ratings cut, which signals to investors that Irish sovereign debt is seen as higher risk.
The difference in yield, or spread, between Irish and benchmark German 10-year government bonds rose three basis points to 203 following the rating cut but has since fallen back to 193.
The NTMA raised a further €2.25 billion in short-term funding on Thursday through the State’s treasury bills programme, bringing to €11.5 billion the amount raised through bills since the programme began in March.
