Ireland Raises $3.3 Billion in First Issue of 2013


Ireland sold 2.5 billion euros ($3.3 billion) of debt on Tuesday, raising a quarter of the 10 billion euros it aims to borrow in 2013 ahead of a planned exit from its EU/IMF bailout.

Ireland had said on Monday it would kick off the funding plan by reopening the 2017 bond it issued last July. That 3.8 billion euro sale marked the country's return to the long-dated debt market following its EU/IMF rescue in November 2010.

The National Treasury Management Agency (NTMA), Ireland's debt agency, had hoped to sell around 2 billion euros, a source close to the deal said on Monday, but netted more after orders topped 7 billion euros.

"There was very strong demand from a lot of the big pension funds, asset managers and real money accounts. This isn't domestic accounts or hedge funds leading the charge, and that will be encouraging for the NTMA," said Owen Callan, a bond dealer at Danske Bank, one of the lead managers for the deal.

"To get 25 percent of issuance for the year away in the first week of January means they are well ahead of the curve and bodes well for the future. It shows that investors very much believe in the Irish recovery story."

Bumper demand also allowed the debt agency to tighten the deal's pricing, trimming the yield to around 3.35 percent from 3.45 percent indicated at launch, bankers said.

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The deal saw some investors return to the Irish debt market after a two-and-a-half year hiatus, another trader said.

The 2017 paper was initially sold in July at a yield of 5.9 percent but demand for Irish debthas since pushed its yields below those of Spain, still widely expected to need a bailout, and close to those on Italian debt.

Irish bonds' outperformance, driven by Dublin's steady progress in meeting targets set under its bailout and a more stable environment across the euro zone, also allowed the country to undertake two bond swaps, a maiden amortising bond issue, and a number of treasury bill sales last year.

That sliced 10 billion euros off Ireland's post-bailout funding needs, easing its path towards exiting the programme on schedule at the end of the year.

The NTMA said in November that it wants to raise another 10 billion euros this year to cover the country's 2014 funding requirements and hopes to return to regular monthly bond auctions sometime this year.