Ireland’s debt agency raised €1.25 billion in government debt on Thursday after it successfully completed two bond auctions despite ongoing upheaval in the wider sovereign debt market.
The National Treasury Management Agency (NTMA) sold €550 million worth of bonds due to mature in 2032, along with €700 million worth of debt to mature in 2035, it said in a statement.
The yield, or interest rate, on the 2032 bond was 3.231 per cent, while the rate on the 2035 bond was 3.416 per cent. The six-year debt was 2.34 times oversubscribed, while the nine-year debt had a bid-to-cover ratio of 1.89. Those yields are well below the equivalent for the UK and comparable to Germany, traditionally the European safe haven in times of stress.
When the NTMA sold 10-year debt in July, it paid a yield of 3.242 per cent and saw a bid-to-cover ratio of 1.97.
[ NTMA increases State savings rates for first time in three yearsOpens in new window ]
The auctions had been closely watched, coming amid turmoil in the global government bond market in recent weeks. The yield on US, European and Japanese bonds have spiked, amid worries that inflation may be allowed to increase as well as fears that government indebtedness in the West may becoming untenable.
Benchmark US 10-year treasury yields hit the highest level since 2023 on Wednesday, while interest on German bunds hit a level not seen since 2011. The yield on gilts, as UK goverment bonds are known, are close to their highest since 2008.
Despite the sell-off in recent days, global bonds recovered some losses on Thursday.
Gilts pared some of their weekly move, with 10-year yields three basis points lower at 5.2 per cent. Thirty-year yields fell three basis points to 5.83 per cent after hitting a 1998 high on Tuesday.
That may offer some relief to UK prime minister Andy Burnham, who faces his first major challenge at the end of next month when his government unveils its first budget.
“For us we see these yields as attractive as opposed to concerning,” said Craig Inches, head of rates and cash at Royal London Asset Management. “To be able to buy sovereign assets in the UK at almost 6 per cent or the US at 5.3 per cent for 30 years seems a pretty good deal.” – Additional reporting: Bloomberg