[antoobrien]

Originally Posted by doc_17

Why are we issuing these?

So we have to pay back 500mil + interest in October? I don't understand! Maybe some of the experts out there can explain it to me?

We have over €3bn of short term debt that maturing (i.e. needs to be paid or renewed) this year. This will be refinancing some of this.

If you're old enough you'll remember credit unions having limits on the first and sometimes second loans of twice savings, so that a member can prove they can and will repay money. This is the same general concept - €500m is not a massive amount of money in the grand scheme of international finance (Iceland have €1.6 bn in loans with the IMF, we have €18bn). We're issuing a small amount (low risk) money to prove we can and will meet our responsibilities.

It'll be interesting to see how yields react after this.

[Scofflaw]

Originally Posted by doc_17

Why are we issuing these?

So we have to pay back 500mil + interest in October? I don't understand! Maybe some of the experts out there can explain it to me?

Partly they're just testing the waters:

Speaking today, NTMA Chief Executive John Corrigan said: “The resumption of Treasury Bill auctions follows an intensive engagement with investors both domestically and overseas during the past 18 months and marks an important first step in our phased re-entry to the capital markets.“

Borrowing short term like this suggests that the NTMA perhaps sees yields as probably continuing to drop, which means this debt could be rolled over into longer term debt in October. If yields rise, it could presumably be rolled back instead. As to what they'll spend the money on...either refinancing existing debt, or to build up Exchequer cash reserves against the end of the troika financing in December 2013.

cordially,
Scofflaw

[woodyg]

it will be interesting to see the Markets response Thursday.
it may well only be a dip the toe test but it's still the 1st test since Sept 2010.

if the % rate on the interest continues to slide downwards in our favour a partial entry over the next 6-9 months before a full return looks ever more likely.

to get rates below 3.5% would still require a serious change in market sentiment though

[daltonmd]

Originally Posted by doc_17

Why are we issuing these?

So we have to pay back 500mil + interest in October? I don't understand! Maybe some of the experts out there can explain it to me?

From Stephan Kinsella over in Irisheconomy.ie
"Today the NTMA announced Ireland will resume treasury bill auctions, the first since September 2010. This is a really good thing.
But this does not mean Ireland is “back in the bond market”, with all the baggage that phrase has for Irish people these days. We’re back in the Bill market. Journalists in particular should understand the difference between bonds and bills.
While both bonds and bills are debt obligations, in other words when you buy either a bond or a bill you are lending your money to the Irish government, and both are auctioned, bills are used as short term liquidity instruments, typically repaying the bill buyer in 3 months or 6 months or something like that, while bonds carry much longer maturities, usually 2 years, 5 years, 10 years, even 30 years, and are typically used to pay down other maturing bonds or to finance state expenditure. See these lecture notes, slide 218 in particular, for more details. Update: these ones are way better.
Thus Bills differ in their form and their usage, it doesn’t make sense to confuse them. While today’s announcement is a good sign, we shouldn’t get too excited over their issuance. Portugal has been issuing T-Bills throughout its time as a programme country, and even Greece got some away in May.
For these reasons we shouldn’t read too much into the yield and bid to cover ratios of these bills. It’s still a positive first step, but it’s not Ireland dipping its toes in the water of the markets, more like us taking off our socks near the pool."

[darkman2]

As of tomorrow morning Spain 9 year yield 6.9% vs Ireland 9 year 6.2%.


The difference between Ireland and Spain/Italy is that Ireland appears to have held it's gains from the summit whereas Spain and Italy have lost all the gains they made on the back of a disappointing ECB press conference last Thursday about the ESM and Spanish banks.

[darkman2]

Irish bonds steady - 6.2% - Spain way up over 7%. Italian yields may surpass Ireland's. Spain and Italy in quite serious trouble atm.


Irish 1 year yield about to cross under 4%

http://www.bloomberg.com/quote/GIGB1YR:IND/chart

[Scofflaw]

Originally Posted by darkman2

Irish bonds steady - 6.2% - Spain way up over 7%. Italian yields may surpass Ireland's. Spain and Italy in quite serious trouble atm.

Every silver lining has a cloud.

cordially,
Scofflaw

[Sponge Bob]

Meh . Bunds are nearly all negative so our spread over the Bund is worse than it was when we exited the market nearly 2 years ago.

[Scofflaw]

Originally Posted by Sponge Bob

Meh . Bunds are nearly all negative so our spread over the Bund is worse than it was when we exited the market nearly 2 years ago.

Well, don't let it get you down, eh?

cordially,
Scofflaw

[darkman2]

Irish short term bonds at new crisis lows - undergoing a rally in recent days.


2 year bond is down around 9% today on yesterday @ 4.1%

http://www.bloomberg.com/quote/GIGB2YR:IND/chart


Maybe it's time for the NTMA to issue a two year bond in September. Ireland still basking in the glow of it's apparent summit triumph.

[roro2]

Originally Posted by darkman2

Maybe it's time for the NTMA to issue a two year bond in September. Ireland still basking in the glow of it's apparent summit triumph.

There is already a large bond maturity of over €8bn in 2014, in the first year of non-Troika funding. I would imagine they would prefer to issue further out the curve, 2017 is a "blank" in terms of maturities for example.

[antoobrien]

Originally Posted by roro2

There is already a large bond maturity of over €8bn in 2014, in the first year of non-Troika funding. I would imagine they would prefer to issue further out the curve, 2017 is a "blank" in terms of maturities for example.

Or do a bond swap, like the one that reduced the €12bn that was due in 2014 to
the current €8bn.

Interestingly it's the 1, 2 & 3 year bonds that are significant movers today (0.75% or more of a change).