Ireland raised 1 billion euros by issuing the first sovereign amortising bonds today, slicing a further chunk from its post-EU/IMF bailout borrowing requirements.
Some €330.95 million of the 35-year bond was sold at a yield of 5.92 per cent. The 30-year bond sold €322.9 million, while securities with a 25-year maturity sold €298.35 million.
The remainder was split between 20-year bond at a yield of 5.82 per cent, and the 15-year maturity at 5.72 per cent.
“The success of today’s transaction demonstrates the willingness of domestic investors to increase their holdings of Irish government debt,” John Corrigan, chief executive of the National Treasury Management Agency (NTMA), said in a statement.
“Today’s transaction combined with the bond switch and outright sale transaction of July 26 and the bond switch transaction of January 25 has in effect reduced the original “funding cliff” of 11.9 billion euros (due to the January 2014 bond maturity) by 80 percent to just under 2.4 billion.”
It’s the first time the NTMA has offered amortising bonds to the market. The securities make equal annual payments over their lifetime, which includes a partial principal repayment and a payment of interest. The NTMA said they were designed to meet the needs of the Irish pensions industry.