The National Treasury Management Agency (NTMA) of Ireland today auctioned three month bonds worth €500m, helping it to hit 80% of its €8 billion target for the year.
The Treasury Bills on auction offer an annualised yield of 0.105%, with a maturity of three months. The auction was more than four times oversubscribed, with total bids numbering €2.1 billion, according to the NTMA. Last month, the agency auctioned the same amount of three month bills at a yield of 0.22%.
Following stimulus measures taken by the European Central Bank (ECB) and a recent rating upgrade by Standard & Poor, Irish borrowing costs have fallen dramatically, to almost record lows. This, combined with ECB President Mario Draghi’s hints that easing measures will continue, has led to what is being described as a “yield grab” of Irish bonds. Today, the yield on 10 year Irish bonds has remained at 2.4%, keeping its borrowing costs lower than those of the UK.
A total of US$4.88 trillion of debt has been sold so far this year reports Dealogic, close to the level of 2007 when US$4.91 trillion of bonds were issued over the same period.
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