The National Treasury Management Agency (NTMA) has hired a group of financial houses to sell €3 billion of bonds that will mature in 10 years, as it seeks to tap heightened investor demand for government debt before expected central bank rate cuts this year.
The State’s debt management agency, led by chief executive Frank O’Connor, is typically among the first euro zone government debt issuers ever year.
While it also usually raised more than original target in the first bond deal of the year, this year it has set a cap at €3 billion. This most likely reflects the fact that it only plans to raise between €6 billion and €10 billion on the bond market in 2023 and would like to spread out bond sales to take advantage later in the year of potentially lower borrowing rates, according to observers.
The NTMA has hired Barclays, BNP Paribas, Cantor Fitzgerald Ireland, Citigoup, Danske Bank and JP Morgan as joint lead managers of the bond sale. The deal is expected to price on Thursday, according to market sources.
Investors are rushing to snap up government bonds to lock in higher yields before central banks start loosening monetary policy, even though traders have pared back bets on the pace of rate cuts for this year. Money markets are wagering that policymakers at European Central Bank, Bank of England and Federal Reserve will cut rates by five quarter-points by the end of 2024, according to Bloomberg.
