Markets

Ireland raises 4bn euros in bond sale

DUBLIN: Ireland raised 4 billion euros ($4.49 billion) from a syndicated sale of a new 2050 bond on Thursday after i
Published May 9, 2019

DUBLIN: Ireland raised 4 billion euros ($4.49 billion) from a syndicated sale of a new 2050 bond on Thursday after investors swamped the book with demand for 4.5 times that amount.

The amount raised beats earlier expectations of 3 billion euros and comes at a yield of 1.528 percent, a lead manager said in a note seen by Reuters.

In January, Ireland raised 4 billion euros from a sale of 10-year bonds at a yield of 1.123 percent.

A 4 billion euro issue would mean that Ireland has already raised more than 9.5 billion euros of planned 2019 debt issuance of between 14 billion euros and 18 billion euros.

Demand for the bonds when the books closed was in excess of 18 billion euros, with final terms set at 47 basis points over mid-swaps.

The National Treasury Management Agency did not immediately respond to a request for comment.

The syndicated deal replaces a bond auction that had been scheduled for Thursday after Cyprus's recent first 30-year bond sale was overloaded with orders.

The use of syndication broadens the investor base for the bonds, allowing smaller euro zone countries to compete with the larger countries that can attract demand because of their benchmark status. Using banks to find demand should also help to secure more aggressive pricing and ensure liquid trading.

High demand for long maturities -- with Ireland an active seller in recent years -- shows how much Europe's bond market is adjusting to expectations of persistently low interest rates and central bank stimulus.

Barclays, BNP Paribas, Cantor Fitzgerald Ireland, Danske Bank, Deutsche Bank and Goldman Sachs are joint lead managers for the transaction.

Copyright Reuters, 2019

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