Ireland has returned to the bond markets for the first time since the €85bn IMF/EU bailout almost two years ago – a move hailed by European Central Bank chief Mario Draghi as "a success that should be properly celebrated".
The country's national debt agency raised €500m (£399m) in an auction of three-month securities in what was seen as a toe-in-the-water exercise to test whether Ireland can return to the sovereign debt market.
Finance minister Michael Noonan said the sale marked an "important milestone on Ireland's continuing path to recovery" after it received €1.4bn in bids for the securities, an indication of healthy demand.
The treasury bills were sold at a yield of 1.8% – lower than the level achieved by the Spanish. But critics dismissed the sale, saying the offering was too small, and the debt too short-term, to be a credible test.
One of Ireland's most outspoken investment commentators, opposition senator Shane Ross, a former financial journalist, dismissed the sale and its outcome as "not a return to the bond market."
He accused the National Treasury Management Agency (NTMA) of "pulling a PR stunt" and described the amount auctioned as "peanuts."
Karl Whelan, professor of economics at University College Dublin, described the sale as a "sideshow", pointing out that even Greece is selling three-month treasury bills. "Ireland has funding from the EU and the IMF through until late 2013.
Investors are taking minimal risk in buying these treasury bills. Indeed, Greece and Portugal also have treasury bill programmes.
Market sentiment towards Ireland has improved since last Friday's eurosummit announcement, but today's T-bill sale is largely a sideshow," said Whelan.
The NTMA's chief executive, John Corrigan, sounded a cautious note, saying he was "conscious that this is only the first step towards our ultimate goal of full access to the capital markets".
"It's a significant step but there's a lot more work to do before we get back into the bond markets.
There's a big difference, in fairness, between selling three-month paper and selling longer-term bonds," he told the national broadcaster RTE.
Ireland was effectively frozen out of the sovereign debt markets in September 2010 when yields on bonds became prohibitively high, but it is due to return to the markets next year to wean itself off IMF/EU money, which has been lent until 2014.
Yields on Irish debt have fallen rapidly over the past year, with 10-year bonds dropping from around 14% last summer to around 6.3% now – nearer to the levels where Ireland could resume normal refinancing arrangements at affordable rates.
The EU-IMF money remains far cheaper, however, with average interest costs below 3.5%.
guardian.co.uk
The country's national debt agency raised €500m (£399m) in an auction of three-month securities in what was seen as a toe-in-the-water exercise to test whether Ireland can return to the sovereign debt market.
Finance minister Michael Noonan said the sale marked an "important milestone on Ireland's continuing path to recovery" after it received €1.4bn in bids for the securities, an indication of healthy demand.
The treasury bills were sold at a yield of 1.8% – lower than the level achieved by the Spanish. But critics dismissed the sale, saying the offering was too small, and the debt too short-term, to be a credible test.
One of Ireland's most outspoken investment commentators, opposition senator Shane Ross, a former financial journalist, dismissed the sale and its outcome as "not a return to the bond market."
He accused the National Treasury Management Agency (NTMA) of "pulling a PR stunt" and described the amount auctioned as "peanuts."
Karl Whelan, professor of economics at University College Dublin, described the sale as a "sideshow", pointing out that even Greece is selling three-month treasury bills. "Ireland has funding from the EU and the IMF through until late 2013.
Investors are taking minimal risk in buying these treasury bills. Indeed, Greece and Portugal also have treasury bill programmes.
Market sentiment towards Ireland has improved since last Friday's eurosummit announcement, but today's T-bill sale is largely a sideshow," said Whelan.
The NTMA's chief executive, John Corrigan, sounded a cautious note, saying he was "conscious that this is only the first step towards our ultimate goal of full access to the capital markets".
"It's a significant step but there's a lot more work to do before we get back into the bond markets.
There's a big difference, in fairness, between selling three-month paper and selling longer-term bonds," he told the national broadcaster RTE.
Ireland was effectively frozen out of the sovereign debt markets in September 2010 when yields on bonds became prohibitively high, but it is due to return to the markets next year to wean itself off IMF/EU money, which has been lent until 2014.
Yields on Irish debt have fallen rapidly over the past year, with 10-year bonds dropping from around 14% last summer to around 6.3% now – nearer to the levels where Ireland could resume normal refinancing arrangements at affordable rates.
The EU-IMF money remains far cheaper, however, with average interest costs below 3.5%.
guardian.co.uk
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