* New issue in 'near future', possibly Wednesday
* Main step in planned return to full-market funding
* Ireland on course to be first euro zone country to exit
By Stephen Mangan and Padraic Halpin
DUBLIN, March 12 Ireland is to issue its first
new benchmark 10-year bond since its EU/IMF bailout in the "near
future", its debt agency said on Tuesday, a landmark on its
route to becoming the first bailed-out euro zone country return
to full market funding.
The National Treasury Management Agency (NTMA), which began
borrowing again from capital markets last year, had earmarked a
new benchmark issue as its most significant step towards a full
market return ahead of regular bond auctions later this year.
One industry source said the books were expected to open on
Wednesday. The NTMA made a similar pre-announcement in January
before it opened its five-year syndicated deal the next day.
The new bond, to mature in March 2023, will be Ireland's
first benchmark bond since soaring yields forced it to take
refuge in a 85-billion euro ($110 billion) bailout in 2010.
The notes will be issued through a syndicated transaction
subject to market conditions, with details to be announced in
"due course", the NTMA said in a statement.
One industry source said the debt agency was expected to
issue a minimum of 2.5 billion euros. A second industry source
said it would likely be between 2 and 3 billion euros.
DEMAND SEEN STRONG
"It will be significantly well oversubscribed. There is a
lot of demand that had been waiting for the bond issuance for
the last number of weeks," said Ryan McGrath, a bond dealer at
Dolmen Securities, who said he expected to see yields somewhere
between 4.25 percent and 4.40 percent.
The head of the NTMA said regular auctions would probably be
enough to see it qualify for the ECB's Outright Monetary
Transactions (OMT), a scheme the government has said it would
like to apply for in due course.
Dublin wants to have backstops like potentially unlimited
ECB bond purchases and the availability of a conditional line of
credit from official lenders in place as it exits its bailout to
make investors more comfortable to lend it money.
The ECB launched the OMT program last September to counter
investor fears of a euro zone breakup but it has yet to deploy
it, with some policymakers at the bank preferring to keep it
ECB policymaker Benoit Coeure, who says the program is ready
for use, told Reuters last month that Ireland had not yet
demonstrated the regular market access deemed necessary for
qualification and that Frankfurt needs to see issuance at
different points across the yield curve.
Ireland already is on course to get off support from the EU
and IMF after raising over a quarter of its long-term funding
target for this year in January by selling 2.5 billion euros of
Its steady market return has been helped by a sharp fall in
Irish bond yields over the past 18 months. Irish debt now trades
below the equivalent levels of Spanish and Italian government
bonds, two fellow euro zone strugglers which have avoided
Yields on Ireland's current benchmark 2020 bond
were little changed at 3.7 percent on Tuesday
after falling last week on a pledge by European Union finance
ministers agreed to look at how to extend the maturity of
emergency loans Ireland and Portugal have received under their
In July 2011, the yield on the same bond had stood at more
than 15 percent.
The NTMA said it had mandated Barclays, Danske Bank
, Davy stockbrokers, Goldman Sachs International
, HSBC and Nomura as joint lead
managers for the new 10-year bond.