Ireland borrows at a record low rate in bond auction

Ireland has raised €1 billion in 10-year borrowings this morning at a rate of just under 1 per cent. The auction was launched into turbulent markets but bond prices were strong this morning, which helped push down the cost of raising the funds.

The National Treasury Management Agency auctioned €1 billion of the 2026 bond this morning, raising funds at a yield of 0.999 per cent. The NTMA received offers of €1.8 billion, meaning the issue was 1.8 times covered.

Irish bond interest rates fell this morning ahead of the auction, providing a good backdrop for the National Treasury Management Agency (NTMA) as it launched its €1 billion bond auction this morning. A big sell-off in equity markets and a new bout of global nervousness drove cash back into bonds this morning, pushing interest rates on Irish 10-year bonds traded between investors below 1 per cent.

There had been some limited signs of nervousness in the Irish bond markets in some recent trading sessions, as the gap between Irish and German bonds widened slightly, attributed to investor nerves ahead of the general election. However this morning money flooded back into European bond markets across the board and Ireland, with the interest rate on the 2026 bond, launched last month, falling back below 1 per cent in trading between investors.

The NTMA would normally offer a slightly better price to investors than what is currently on offer in the market when it is auctioning debt to raise money, but the uplift this morning was small. Having raised €3 billion through a syndicated issue of the new bond in January , it auctioned a further €1 billion today, which will complete its fund raising for the first quarter of the year. The mood towards bond markets was further boosted this morning by a cut in Swedish interest rates.

Market sources say demand for Irish debt is underpinned by the better rates available to investors than those on comparably French and Belgian debt and by the latest upgrading by Fitch.