NTMA will focus on re-engaging with the markets
The chief executive of the National Treasury Management Agency, John Corrigan, has told the Oireachtas finance committee that the agency wants to issue a ten year bond this year.
Mr Corrigan said that the agency has recovered normal market access in short-term debt issuance, as the last treasury bill auction had resulted in an annualised yield of 0.2%, a very low cost of borrowing.
He also said that financial markets had priced in the prospect of a deal on the promissory notes, and this had helped to reduce the yield on Irish debt.
Mr Corrigan told the Oireachtas Committee on Finance, Public Expenditure and Reform that the market re-engagement would position Ireland to successfully exit the EU/IMF programme on schedule at the end of the year.
The NTMA has said it will focus on stepping up its re-engagement with the market this year.
The agency's chief executive John Corrigan told the Oireachtas Committee on Finance, Public Expenditure and Reform that the market re-engagement would position Ireland to successfully exit the EU/IMF programme on schedule at the end of the year.
He said the agency would raise €10 billion during the year.
Mr Corrigan said that raising €2.5 billion through a successful debt issue earlier this month meant that the NTMA was already a quarter of the way towards this target.
Mr Corrigan also said the NTMA is likely to proceed with a syndicated issue of a longer-term bond prior to resuming scheduled bond auctions, although it will remain adaptable in light of market circumstances.
In his opening statement he also told the committee that Ireland has already made considerable progress in re-engaging with the markets.
Mr Corrigan said that it would be very positive if the EFSF and EFSM European bailout loans could be extended. He said that there is an EFSF bond of €5 billion euro due in 2015, which if extended would mean that the State would have to raise €5 billion less from the markets that year.
Earlier this week the government asked EU finance ministers to see if an extention of some EU bailout loans could be extended over much longer terms.
Deputy Michael McGrath asked about the movement of senior Department of Finance figues including Michael Torpey to senior roles in the Bank of Ireland.
Mr Corrigan said mobility with the private sector is a critical component to the NTMA model as it is a skills based organisation.
If that model is to be successful we have to accept that it is a two way street, he said. Notice periods in the NTMA vary from one to three months, and six months for the CEO.
"The cooling off period needs to be reviewed especially in the wake of the incident you referred to, but difficult to have a one size fits all policy in which we are paying people big money for gardening leave, but it probably does need to be finessed".
Asked when there would be a favourable revision of Ireland's ratings with the ratings agencies, Mr Corrigan said that they would probably revise their ratings when we exit the troika's programmes.
He said he didn't want to be critical of ratings agencies but they had followed the markets on the way down and would probably follow the markets on the way up.
He said the focus of selling Ireland was with larger investment houses who don't rely on ratings agencies and have their own in-house assessments.