Dáil Éireann Debate, Thursday - 21 March 2013
93. Deputy Pearse Doherty asked the Minister for Finance if he will account for the premium yield paid by the National Treasury Management Agency on its recent €5 billion issuance of ten-year bonds when compared with the yield on the existing 2020 bond. [14573/13]
Amharc ar fhreagraIreland successfully issued a new €5 billion benchmark bond on 13 March at a yield of 4.15%. This sale was the National Treasury Management Agency’s (NTMA) first new 10-year issuance since January 2010 when €5 billion of the October 2020 bond was issued at a yield of 5.091%. The issue yield of 4.15% represented the fair value price for a bond maturing in 2023 relative to the yields at which the existing 2020 and 2025 bonds were trading at on 13 March, that is 3.68% and 4.45% respectively. I am advised by the NTMA that a premium was not paid relative to that fair value price. It is normally the case that a new issue premium is required for multi-billions issues but the strong demand for this bond resulted in a zero premium.
There was broad investor interest in the issue with some 400 investors submitting bids, including fund managers, banks, pension funds and insurance companies. Some 18 per cent was taken up by domestic investors and 82 per cent by overseas investors.
