* Mantra of 'under-promise, over-deliver' pays off
* Early roadshows, tight organisation win praise
* Investors who overlooked Ireland regretting it
By Padraic Halpin
DUBLIN, Dec 13 Six months after Ireland was
rescued from financial crisis with an international aid package,
some investors were treating the country as an emerging market.
The reputation of the former triple-A credit rated sovereign
was in tatters, and it fell to a team of three officials in the
Irish debt management office to try and turn its image around.
The government embarked on a relentless austerity programme
that reduced the budget deficit and the open economy has started
to grow, bringing unemployment down to a four-year low.
Meanwhile, the debt officials went on a charm offensive to
win back investors' confidence and make sure they understood
that Ireland was the success story of the euro zone crisis.
They succeeded, and Ireland will exit the 85-billion euro
bailout agreed with the International Monetary Fund and European
Union in 2010 as planned on Sunday with enough funding from the
debt markets to cover costs until 2015.
"Coming back to the very early days of 2011 when we went to
meet investors, having traded off a triple-A credit rating, we
were now being met by the emerging markets desks of certain
investment houses," John Corrigan, boss of the debt office said
"Happily we don't meet those any more."
The decision to engage early, however, proved essential to
Ireland's success. In contrast, Portugal waited over a year into
its bailout before meeting investors ahead of its first foray
last year back into bond markets while twice bailed out Greece
is due to launch its first official investor relations campaign
only early next year.
When Corrigan and his team first hit the road months after
the November 2010 bailout, the government - just two months in
power - was scrambling to draw a line under a crippling banking
crisis. Yields on 10-year debt were heading towards 15 percent
and commentators were openly debating whether or not Ireland
The National Treasury Management Agency's (NTMA) gameplan,
hatched when it was locked out of bond markets in September 2010
and Ireland hurtled towards the EU/IMF bailout, was based on
three simple principles - tell investors the facts, set
reasonable goals and return regularly.
"Under-promise and over-deliver" was Corrigan's mantra for
over two years of intensive roadshows. At one point, the team
covered both coasts of the United States, travelled through much
of Asia and finished in Japan in just two weeks. Each night, bar
three, was spent in a different city.
Corrigan, 66, was joined on the road by director of funding
and debt management Oliver Whelan and Rossa White, the first
chief economist appointed at the NTMA, who joined from
Dublin-based Davy Stockbrokers just before the bailout.
The trio met 130 institutions in North America, Europe and
Asia in May and June of 2011, shortly before Moody's downgraded
Ireland's credit rating to junk.
Dublin had also begun haircutting junior debt holders in its
mostly state-owned banks, complicating matters further.
"The eagerness and willingness to meet us was very
encouraging, given we were selling nothing and weren't going to
be selling anything for quite a while, other than a message that
the government were serious about," Whelan told Reuters.
Aided by a more benign backdrop in Europe, the story slowly
gained traction. One early convert, U.S. asset manager Franklin
Templeton, bought up to 10 percent of Irish paper in what would
prove to be one of the canniest trades of Europe's debt crisis.
When the NTMA dipped its toe back into markets in January
2012 with a bond switch, the yield on two-year paper had fallen
to just over five percent from a high of 24 percent.
At the same time, the economy had begun to grow again, the
worst of the banking crisis passed and unemployment was showing
signs of stabilising. Even though many investors had thick
dossiers on Ireland, often the key was to keep it simple.
Whelan recalls how, knowing that Ireland's double-digit
falls in unit labour costs were sure to impress, he would talk
about young people he knew who were joining accountancy firms on
much reduced starting salaries.
Roadshow participants also point to the professionalism
chief economist White showed, updating yield-hungry investors
with detailed 80-page presentations on the state's rebalancing
economy, public finances and property market.
The NTMA drive was also helped by Corrigan's extensive role
- as the agency's boss he also oversaw Ireland's "bad bank",
which is now one of the world's biggest property owners, its
pension fund, a unit managing Dublin's bank stakes and another
advising on privatisations. Investors wanted to meet him.
"I think what they realised early on was that there was no
point in waiting until your story improves to start marketing,"
said one market participant in Irish debt, who declined to be
named as he is not authorised to speak to media.
"They recognised that if they didn't tell the story, the
narrative would be stolen by someone else. That was incredibly
important. They were really well organised. It was a very
powerful marketing effort and is a blueprint of how to do it."
A resumption of treasury bill auctions followed in July
2012, as did the first sale of new long-term debt. A landmark
10-year issue earlier this year ensured Ireland would leave its
bailout flush with over 22 billion euros of cash, almost twice
the amount initially envisaged by its international lenders.
It was a long haul, Whelan admits, remembering one occasion
when the team arrived after midnight for meetings the next
morning to find two of their hotel rooms had been given away and
fresh accommodation had to be hastily found down the road.
It was interesting and rewarding work, added Whelan, who
like Corrigan joined the NTMA when it was formed in 1991. Before
that both men worked in Ireland's finance department, while
Corrigan also spent time at Allied Irish Banks.
"The job was to get Ireland back into the markets in a
sustainable way. Clearly all the cards were not in our hands but
in presenting the story and going back and back and back, there
is a sense of personal satisfaction there," Whelan said.
As the bailout ends, Irish 10-year debt is trading at 3.5
percent ahead of a first bond auction programme in four years
due to be detailed in January - a move Corrigan said last month
would show investors that it is "business as usual" again.
The country's debt is still rated as junk by Moody's - much
to Corrigan's annoyance - although it has changed its outlook to
stable from negative while Fitch and Standard & Poors have both
maintained Ireland on an investment grade rating.
"The people who took on board the credibility of the story
back in 2011 made a lot of money by buying our bonds on the
secondary market," Corrigan said. "The people that didn't are