MNI INTERVIEW: Strong Irish Bond Demand, No FX Issuance Plans

Demand for Irish sovereign debt is strong, and Ireland has no plans to borrow in foreign currency, the head of funding and debt management at the National Treasury Management Agency (NTMA) told MNI.

"We have seen continued strong demand among investors for Irish sovereign debt," Frank O'Connor wrote in an email response to written questions. Ireland's borrowing programme has benefiting from the NTMA's EUR17 billion in pre-funding entering 2020, a smoother and longer debt maturity profile and the accommodative monetary stance of the European Central Bank.

The Agency has raised EUR20 billion in long-term funding so far this year, at an average yield of 0.27% and an average maturity of more than 11 years, representing more than 80% of the upper end of the EUR20 billion to EUR24 billion range anticipated in April, when the Irish Government's Stability Programme Update was announced.

The NTMA has issued EUR4.75bn in T-bills, of 5 and 6 months' duration, in the year-to-date, O'Connor said. There are currently no plans to issue foreign currency debt.

Investor sentiment towards Irish sovereign debt "will remain positive, particularly on a relative basis, supported by our smoother and longer debt maturity profile," O'Connor continued. "It is worth noting that Ireland is in a strong technical position as we do not have any bond maturities in 2021."

Asked what impact the eventual unwinding of the ECB's pandemic emergency asset purchase programme will have on the bond market and bond issuance, O'Connor said that "the underlying conditions and drivers that might lead the ECB to unwind and the modalities such as the pace of any unwinding of PEPP, would be important in any assessment."