What products do the government use to borrow money?

euser1984

Thanks.

Geuze

Products?

They issue bonds.

www.ntma.ie

Geuze

http://www.ntma.ie/business-areas/funding-and-debt-management/government-bonds/

A list of current bonds.

euser1984

Geuze wrote: »

http://www.ntma.ie/business-areas/funding-and-debt-management/government-bonds/

A list of current bonds.

does that mean that ireland has bonds where people are getting up to a 5% return?

Geuze

euser1984 wrote: »

does that mean that ireland has bonds where people are getting up to a 5% return?

The 5% in the name of a bond is the coupon rate.

Don't confuse the coupon rate with the current yield, or the YTM yield to maturity.

So for example, take the bond:

5.00% Treasury Bond 2020

This was issued in 2010, and will be repaid in 2020.

Yes, it pays annual interest of 5 euro per bond.

But that bond now trades for 116.52.

So the running yield is 5.00 / 116.52 = 4.29%.

Also, if you buy it now, and hold until 2020, the holder will lose 16.52, as they will be repaid 100.

Combine the running yield with the capital loss, and you get the YTM of about -0.53%

euser1984

Geuze wrote: »

The 5% in the name of a bond is the coupon rate.

Don't confuse the coupon rate with the current yield, or the YTM yield to maturity.

So for example, take the bond:

5.00% Treasury Bond 2020

This was issued in 2010, and will be repaid in 2020.

Yes, it pays annual interest of 5 euro per bond.

But that bond now trades for 116.52.

So the running yield is 5.00 / 116.52 = 4.29%.

Also, if you buy it now, and hold until 2020, the holder will lose 16.52, as they will be repaid 100.

Combine the running yield with the capital loss, and you get the YTM of about -0.53%

I was thinking that it would be around that. so can the irish government issue more bonds? is that why we could only get vulture funds?

do governments get money with other financial products?

Geuze

euser1984 wrote: »

I was thinking that it would be around that. so can the irish government issue more bonds?

Can the Irish Govt issue more bonds?

Yes they can, and they do.

They repay old debt by issuing new debt.

So new bonds are created every so often, as old bonds mature.

Geuze

euser1984 wrote: »

so can the irish government issue more bonds? is that why we could only get vulture funds?

do governments get money with other financial products?

I don't understand your reference to vulture funds.

Do Govts borrow other than issuing bonds?

Yes, they often issue short-term bills.

They may also borrow from the IMF, if it's an emergency.