Ireland Makes Tentative Step To Market Access With Bill Auction |
| Wall Street Journal - Jul 3, 2012 |
Ireland will make a tentative step towards regaining the trust of bond investors Thursday when it sells 500 million euros ($629 million) of treasury bills, marking the bailed-out country's first auction since it was locked out of the international capital markets in September 2010.
Amid a huge banking crisis, the Irish government was forced to turn to the European Union and International Monetary Fund for EUR67.5 billion in loans when investors refused to lend it any more money in late 2010. But if it is to avoid a second bailout, the government needs to be able to fund itself entirely from the bond markets by the time the current EU and IMF loans expire at the end of next year.
The plans by the National Treasury Management Agency--the country's debt office--to auction treasury bills maturing in three months is therefore very much a first, small step along a difficult road for Ireland. It will take some time before the NTMA can convince investors to buy Irish long-dated bonds that would signal that the country will be able to stand on its own feet again, analysts said.
"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," said Stephen Kinsella, an economics lecturer at the University of Limerick.
Portugal and Greece, which like Ireland are recipients of bailouts from the EU and IMF, have regularly sold treasury bills with little difficulty. So the ability of Ireland's government to do the same won't mark it out as particularly favored by investors.
Read Full Article from Wall Street Journal
- Posted: 2012-07-03 12:28:02
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