Noonan hails bond sale as 'recovery milestone'
on 05/07/2012 14:13:08
Minister Noonan said Ireland secured a better interest rate than expected on the auction of the short-term Government debt.
Demand was high as the National Treasury Management Agency (NTMA) made a return to the international debt markets, with bids almost three times the amount of bills issued.
Mr Noonan said the auction of the bonds, which will mature after three months, was competitive and a good result.
"This morning's successful auction of three months Treasury bills by the NTMA was a very important milestone on Ireland's continuing path to recovery," he said.
The agency sold off its target amount of Treasury bills, securing a 1.8% yield - interest rate on the debt - a better deal than its estimated 2%.
"This was first time that the NTMA has raised money in the markets since September 2010 and highlights the significant progress that the Government has made in restoring Ireland's reputation," said Mr Noonan.
The Minister maintained the auction was an important first step in Ireland's overall plan to make a full return to the capital markets next year and to work towards reducing its deficit.
"The markets have reacted positively to our strong programme implementation to date, to the decisive yes vote in the recent referendum on the stability treaty and the decision taken at last week's summit to break the negative links between the sovereign and the banks," he added.
The auction closed at 10.30am this morning with total bids received amounting to €1.415bn - 2.8 times the amount on offer.
The result, which will be seen as increased market sentiment towards the country, will be used to gauge Ireland's readiness to re-enter the sovereign debt market for trading.
But NTMA chief executive John Corrigan warned while the sale was encouraging, it is only the first step towards Ireland's ultimate goal.
"We are encouraged by the strong demand, the competitive interest rate and the presence of significant international interest in today's auction," said Mr Corrigan.
"However, we are conscious that this is only the first step towards our ultimate goal of full access to the capital markets."
As the sale was confirmed in the Dáil by Education Minister Ruairi Quinn, opposition TDs had a mixed reaction.
"The House may be interested to know that the NTMA sold bonds this morning at a 1.8% yield. That's less than the estimated 2%," said Mr Quinn, who was taking Leaders' Questions.
Opposition deputies accused the minister of using the news to deflect from questions put to him.
"You can't even accept good news. God love you," he replied.
"You can't even accept good news. You're really pathetic," he added.