IRELAND WILL TAP THE MARKET FOR E1.0-1.5bn ON THURSDAY

Ireland will re-open the 1.35% Mar-31 Green Bond and the 1.50% May-50 bond on Thursday and is seeking to sell EUR1.0-1.5bn.

• BACKGROUND: The 1.35% Mar-31 Green Bond was issued through syndication in October 2019 and received strong interest at the time (book size was around EUR11bn with EUR2bn issued). The 1.50% May-50 bond was last tapped on 9 July 2020 with E0.3bn sold at an average yield of 0.60% and bid-to-cover of 2.86x.
• RV/HISTORY: The rally in IGBs since the beginning of June lost momentum in August with yields holding towards the lower end of the YTD range. Similarly, the compression in spreads over bunds has stabilized through August and September. The 1.50% May-50 bond serves as the current 30-year benchmark and trades at a yield of 0.525% off a YTD low of 0.413% on March 9 and 52bp outside the comparable EUR swap. As is the case with Thursday's BTP auction, there will be limited support from the ECB GC meeting given that monetary policy is widely expected to remain unchanged. However, market demand for EGB issuance has remained robust.
• TIMING: Results are due out around 1000BST.